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AusCann Group Holdings Ltd secures two licences

Shares have more than doubled since their February listing price.
AusCann Group Holdings Ltd secures two licences
AusCann is a medical cannabis company

AusCann Group Holdings Ltd’s (ASX:AC8) strategic partner, Tasmanian Alkaloids Pty Ltd has been granted a medicinal cannabis licence and a research and development licence.

The licences mark a significant milestone for the recently formed strategic partnership.

It positions the two companies well to progress their strategy to become a leading supplier of Australian produced high-quality medicinal cannabis to Australian patients.

Elaine Darby, managing director, commented: “This is a major milestone for the strategic partnership and represents significant progress in our joint strategy to become a leading producer and supplier of high quality medicinal cannabis to Australian patients.”


Strategic partnership

AusCann entered into an exclusive strategic partnership in May with Tasmanian Alkaloids, an established manufacturer of alkaloid raw materials, also known as poppies.

Operating since 1976, today Tasmanian Alkaloids produces circa 40% of the world’s alkaloid raw material crop in Tasmania.

It boasts a modern manufacturing facility, which is fully compliant with Good Manufacturing Practice standards.

Tasmanian Alkaloids has established relationships with many of the world’s leading pharmaceutical companies.


Mutually beneficially relationship

Studies have shown that the inclusion of medicinal cannabis into existing pain management regimes involving opiates resulted in an improvement in pain management and quality of life outcomes, and less adverse side effects.

Cannabinoids and opioids share several pharmacologic properties and may act synergistically in pain treatment.

As such, both parties look forward to also working together to develop novel therapeutic products for the relief of chronic pain.

Furthermore, while this strategic partnership builds, AusCann is able to leverage its other partnership with Canopy Growth Corporation in the short term.

AusCann is able to import medicines from its partner Canopy Growth Corporation, North America’s largest producer of medicinal cannabis.

 

Analysis

The two new licences issued by the Office of Drug Control exhibits the benefits that the strategic partnership has for AusCann.

Tasmanian Alkaloids is an ideal partner and strategic fit for AusCann given their expertise in the cultivation, manufacture and distribution of therapeutic pain products within Australia.

Through this significant strategic partnership, AusCann will have access to Tasmanian Alkaloids’ wealth of expertise.

This is a win-win deal for both companies as it also allows Tasmanian Alkaloids to move into the medical cannabis space.

The positive momentum in the medical cannabis sector continues to grow with a comprehensive report by the U.S. National Academies of Science Engineering Medicine released earlier this year confirming that there is substantial and conclusive evidence for the use of medicinal cannabis in the treatment of chronic pain symptoms.

The need for chronic pain control in Australia is substantial and represents a market of over 3 million patients.

AusCann shares are trading up over 110% since their February ASX-listing price of $0.20.

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