Althea hopes to be one of the first to supply the UK with medicinal cannabis
Written on the 7 February 2019 by David Simmons
In late September last year, Althea (ASX: AGH) burst onto the ASX with a heavily subscribed IPO of $19.65 million.
The Melbourne-based medicinal cannabis company joined a suite of Australian companies vying for a slice of the fast-moving and ever-growing medicinal cannabis market.
Though the biggest sector right now is a close call between certain states in the USA and the nationally legalised recreational and medicinal market of Canada, there's plenty of other opportunities elsewhere.
Althea is looking to be one of the first suppliers of medicinal cannabis in the UK following the recent legalisation of medicinal cannabis in the country.
The Victorian company expects to be one of the first to supply the estimated 2.9 million UK cannabis patients with the drug.
Althea has already found considerable success in Australia with its niche formula that combines sales with education as well as on-the-ground medically trained sales teams helping cut through regulation and red tape.
The Australian company's push into the UK will be supported by Canadian giant Aphira, one of the world's largest cannabis companies with a market cap of $3 billion.
The two have entered into a cannabis product acquisition agreement to export medicinal cannabis into the UK, allowing Althea to focus on patient access and product distribution and education.
This deal will last until around 2020 when Althea's Australian production facility is expected to become operational.
Althea CEO Joshua Fegan says the opportunities in the UK are too hard to pass up, especially considering the legislative similarities between Australia and the UK.
"The UK's highly regulated framework for prescribing, supplying and possessing medicinal cannabis products is very similar to that of Australia," says Fegan.
"We know focusing on improving patient access to medicinal cannabis and educating medical practitioners on treatment is the key to establishing market share, so the UK market entry will be based on our three-phased business model successfully implemented in Australia."
Althea expects exports into the UK to commence from around mid-February.
Shares in Althea are up 4.48 per cent to $0.35 per share at 11.07am AEDT.
Business News Australia
Author: David Simmons