MEDICAL cannabis company Cann Group Limited (ASX: CAN) based in Melbourne has made its debut on the ASX, after it successfully raised $13.5 million in a fully underwritten IPO.
The agribusiness giant which breeds, cultivates and manufactures medicinal cannabis for sale and use in Australia issued 45 million new shares yesterday at $0.30 per share, hitting an initial market cap of $31.5 million.
After only a single day of trade, Cann Group shares have more than doubled to open at $0.64 this morning, and are trading up more than 15 per cent at $0.74 at the time of writing (11:19am AEST).
Cann Group chairman Allan McCallum expects the company will build on the standout performance of its IPO to become a world-class medical cannabis provider.
"Our competitive strengths lie in the research and development, cultivation, production and manufacturing associated with the medicinal cannabis value chain," says McCallum.
"We see substantial future growth associated with what we view as a high value agribusiness opportunity."
The company snagged Aurora Cannabis, Canada's second largest listed cannabis company, as a cornerstone investor which subscribed for almost 20 per cent ($6.5 million worth) of CAN shares.
Cann Group will use the funds raised from its IPO to build a second facility in Melbourne, which will be a hub for research and development as well as regular cultivation activity.
AUSSIE CANNABIS STOCKS GRANTED LICENSE TO SOAR
At present, Cann Group is one of only a handful of publicly listed companies which is focusing on large-scale production and distribution of cannabis in Australia.
Over the past few weeks, these stocks have continued a sharp climb due to new licensing agreements and developments in medical cannabis law.
AusCann Group (ASX: AC8) had its own IPO in 2016 and is also primarily focused on manufacture and supply, as opposed to research.
Up until this morning AusCann has been growing and harvesting its cannabis Chile, however a new license will now allow the company to cultivate on home soil.
AusCann managing director Elaine Darby says the license will allow the company to set its large-scale partnership and production plans in motion.
"This license enables us to undertake cultivation of medicinal cannabis at our site in Western Australia," says Darby.
"Through our relationship with our Canadian partner Canopy Growth Corp, the largest producer of medicinal cannabis inNorth America, we are well positioned to execute the next stage of our strategy, with access to a wealth of expertise and experience.
"This in combination with our licensed joint-venture in Chile, means AusCann is positioned to be a leading player in the global medicinal cannabis market."
AC8 shares have spiked a whopping 18 per cent to trade at $0.68 at the time of writing (11:19am AEST).
Business News Australia
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