Both Auscann Group Holdings Ltd (ASX: AC8) and Cann Group Ltd (ASX: CAN) reported their quarterly news this morning.
Auscann and Cann Group are medicinal cannabis businesses. They are both spending money to expand production of cannabis. Canada recently became the second country to legalise recreational cannabis.
The company said that it successfully completed its pilot production of final dose cannabinoid hard shell capsules.
Auscann was pleased with this because: “This success enables the move of the production process into a commercial facility in preparation for Australian market and export supply in 2019.”
In the first quarter of FY19, Auscann’s quarterly cashflow report showed that it spent $776,000 on R&D and a net operating cash total of nearly $2 million with the only form of revenue being $71,000 interest income.
At the end of the quarter it had $43.7 million in cash after a $35 million capital raising.
AusCann Managing Director Elaine Darby said:
“AusCann has a presence across the whole medicinal cannabis supply chain, and together with our partnerships and well-funded balance sheet, we look forward to releasing our capsule-based products in the first half of 2019.”
Cann Group update:
The company said that it has completed 24 harvests and it is now progressing with its large greenhouse at Melbourne’s Tullamarine Airport, which it says could produce more than 40,000kg of cannabis a year by the end of 2020.
In the first quarter of FY19, Cann Group reported in its cashflow statement that it achieved $2,000 of receipts from customers, $483,000 interest earned and the net operating cash outlay was $1.9 million.
Cann Group had $75.8 million cash at the end of the quarter.
The company also welcomed a $27 million initiative, a majority of which is funded by the Federal Government, to establish Australia’s first research hub for medicinal agriculture at La Trobe University’s Bundoora campus in Melbourne. Cann is an industry partner.
The Cann Group and Auscann share prices are down 33% and 62% respectively over the past six months.
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