AUSCANN RESUMES TRADE AFTER $12 MILLION CAPITAL RAISING
Written on the 19 May 2017 by Paris Faint
IT'S BEEN a big few days for medical cannabis manufacturer AusCann (ASX: AC8), as the company emerged from a trading halt today to announce that it had successfully raised $12 million in a share placement with new institutional investors.
The placement received strong interest from both domestic and global companies, as cornerstone investors including Canada's Canopy Growth Corporation and Aussie fund manager Tribeca secured the lion's share of its 24,000,000 new shares, issued at $0.50cps.
Canopy Growth Corporation was the most significant contributor in the recent round, as its investment amounted to an 11 per cent stake in AusCann.
Elaine Darby, managing director at AusCann, says the capital raising's success is due to strong investor interest in the emerging cannabis sector.
"The strong support we have received for this capital raising continues to demonstrate the high level of investor interest in the medicinal cannabis sector in Australia," says Darby.
"The move by the Australian government to introduce a legal framework provides the foundation for us to advance our strategy to supply high quality and affordable medicinal cannabis to patients in need."
The capital raising follows on from AusCann's announcement earlier this week that it has established a partnership with Tasmanian Alkaloids, a private Australian raw narcotics supplier which specialises in medicinal opiates.
It announced the two companies will work together to exploit global market opportunities for the supply of high quality medicinal cannabis products.
"Our Australian medicinal cannabis license and recent partnership with Tasmanian Alkaloids have been major milestones, advancing our development in the Australian market," says Darby.
"We have access to expert knowledge, facilities and unrivalled skills through a range of global partnerships that give AusCann a real and sustainable competitive advantage in the market."
It's only been a year since AusCann's IPO, and since then its stock has continued a sharp climb alongside other Australian companies in the medical cannabis space.
AusCann is currently leading the pack in terms of large-scale manufacturing and supplying of cannabis. It recently celebrated the harvest of its first cannabis crop in Chile as part of a joint venture with the Fundacion Daya company, consisting of 400 plants across eight strains.
The funds secured from its capital raising will be used to enhance its cultivation and manufacturing activities as well as boosting its medical outreach program.
AusCann shares have dipped slightly on resuming trade, currently sitting down 2.2 per cent at $0.57 at the time of writing (1:57pm AEST).
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Author: Paris Faint