One of the leading listed Australian companies playing in the medicinal cannabis sector right now is Cann Global (ASX: CGB), which incidentally used to be a bauxite mining business.
CGB delisted from the ASX for a year in order to realign the business from boring holes in the ground to focusing on a completely unrelated and relatively new industry.
Now another entity with resources sector origins is throwing its hat in the ring - BPH Energy (ASX: BPH), a diversified holding company that has a 26 per cent interest in Advent Energy.
Additionally, the company has two biotechnology plays currently in the commercialisation stage.
These include Cortical Dynamics' Brain Anaesthesia Response Monitor, a device that measures a patient's brain and electrical activity to indicate the effect of drugs administered during surgery; and the HLS5 Tumour Supress Gene; a genetic marker for early and accurate cancer detection.
But BPH is diversifying even further with its foray into cannabis.
In late August BPH acquired 10 per cent of Chilean company Patagonia Genetics, a craft cannabis company with a collection of more than 260 unique cannabis and hemp strains collected from industrial hemp cultivations of the late 1980's.
The deal included an option to acquire 39 per cent more of Patagonia Genetics, but that requires shareholder approval of the extra $700,000 spend required.
In its announcements BPH has noted Patagonia Genetics SpA, while based in the Chilean capital Santiago and with two farms near the southern port city of Puerto Montt, is 100 per cent owned by Brisbane-based Patagonia Genetics Pty Ltd.
Patagonia Genetics believes itself to be the only seed bank in the world to hold the "rarest" F1 Colombian Red, a strain of cannabis once deemed to be lost.
Patagonia Genetics announced today it had purchased the exclusive worldwide distribution rights to Chile's leading cannabis fertiliser and biostimulant range Wonderland Agronutrients.
Wonderland has penetrated over 90 per cent of specialised retail outlets in Chile (over 1,500 outlets) and continues to grow its market share. Medicinal cannabis is decriminalised in the South American country and households are allowed to grow up to six plants at home for personal consumption.
One of Wonderland's products, the Algae-based BIotstimulants range, has been designed specifically for Patagonia Genetics' cannabis plants.
The Chilean group hopes for margins of between 60 and 80 per cent on the Wonderland distribution deal, but the financial impact of the development "is not material".
Patagonia Genetics' Australian office was registered with ASIC on the 8th of March 2019 is headed up by managing director Matthew Critchley (pictured).
According to BPH Critchley has 12 years' experience in accounting, corporate finance and equity markets.
After leaving PKF, Critchley managed a small cap investment fund before managing his own corporate consulting firm. He now runs his own personal investment fund and acts as a corporate advisor to Australian and South American entities.
Back in Chile, Miguel Serrano is the director of Patagonia Genetics, and appears to be the brains trust of the cannabis side of the operation.
He has 33 years of experience in growing, experimenting and cross breeding cannabis strains. In fact, according to BPH, Serrano was the first person to legally grow cannabis in Chile for the purpose of genetic preservation.
The company is currently awaiting the approval from the Chilean Livestock & Agriculture Service (SAG) for 11 applications.
Once approved, the company will be cultivating medicinal cannabis, conducting research and development on its genetic collection, and cultivating seeds locally before the end of FY20.
Business News Australia