The North American influx of medicinal cannabis companies into Australia continues with a Canadian giant listing on the ASX through a joint venture with a local company.
Following a $20 million IPO, medicinal cannabis group Cronos Australia (ASX: CAU) has debuted on the ASX.
The company is the Australian arm of Cronos Group, a Toronto Stock Exchange listed company and one of the top 10 medicinal cannabis companies globally with a market capitalisation of $3.85 billion.
The listing of Cronos in Australia is indicative of the Northern American appetite for Australia's growing medicinal cannabis industry.
Cronos' ASX launch sees the company test the Aussie waters with a relatively soft-launch IPO and market capitalisation of $64.4 million.
Its 'asset-light' business model will first see Cronos Australia import and sell its parent's PEACE NATURALS medicinal cannabis brand, which are currently sold in Canada and Germany.
The company is helmed by chairman Shane Tanner, who brings 25 years of experience in the healthcare industry, including being chairman of Zenitas Healthcare and Paragon Care.
"The ASX listing is a significant milestone in the life of Cronos Australia, and we look forward to delivering on our vision of being a leading health and wellness company in the Asia-Pacific Region through a portfolio of successful, premium cannabinoid brands and products," says Tanner.
Cronos Australia was established as a 50:50 joint venture between Cronos Group and NewSouthern Capital. After the issue of the new shares the Canadian parent will hold around 31 per cent of the newly formed Australian arm.
Cronos Australia CEO Rodney Cocks says the ASX listing of the company will allow Cronos Group to make moves into new regions.
"Cronos Australia is excited to join this fast-emerging sector as Australia's newest listed medical cannabis company," says Cocks.
"Our asset-light business model, backing of Cronos Group and Asia-Pacific focus give the company a unique proposition in our market."
The listing of Cronos Australia is hot on the heels of another North American cannabis giant making moves in the APAC region.
Yesterday, Cann Group announced the signing of a nationwide distribution deal with healthcare services and products supplier Symbion, as well as the first arrival of a high THC oil formulation shipment from strategic Canadian partner Aurora Cannabis (TSE:ACB).
Aurora Cannabis is another giant in the medicinal cannabis space with a market capitalisation of $5.3 billion, making it the third largest cannabis company in the world.
However, unlike Aurora, which is testing the Australian market from afar, Cronos Group's ASX listing is indicative of a serious and growing appetite from these international giants to tackle our growing industry.
The listing of Cronos Australia follows the release of Prohibition Partners' 'The Global Cannabis Report', which showed the number of medicinal cannabis licences in Australia had almost doubled to 81 since its Oceania-focused report was published last year.
The report puts Australia in fourth place worldwide for licences, behind Thailand at 200 for medicinal cannabis sales, while we also has the third-highest number of pharmaceutical cannabis trademarks lodged at 329, placing the industry ahead of New Zealand (172), Germany (131), Mexico (122) and Switzerland (99).
Shares in Cronos Australia are up 4.41 per cent to $0.36 per share at 11.12am AEDT.
Business News Australia
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