Cann Global reports $3.5 million loss as it prepares to relist
27 May 2019, Written by David Simmons
One of Australia's top cannabis companies Cann Global (ASX: CGB) has reported a loss of $3.5 million for the first half of FY19 as the company prepares to relist on the ASX.
Formerly known as Queensland Bauxite, Cann Global made the decision to rename and become a medicinal cannabis business exclusively in January this year.
Since then, the company has been suspended from trading on the ASX as it prepares its prospectus to relist as Cann Global.
In the meantime, the company has continued to be a leader in the industry on both the business and research fronts.
During the first half of FY19 Cann Global reported a loss attributable to shareholders of $3.56 million, down from a loss of $3.4 million in 1H18.
Additionally, the group also saw a loss in revenue of nearly $5 million during the first half as the group continues to spend big on research and expansion. Relisting as Cann Global appears to have been quite an expensive exercise for the company, with legal costs running up nearly $500,000 during the first half.
Since pivoting to cannabis, Cann Global has made a number of key acquisitions to position itself as a juggernaut in the global medicinal cannabis industry.
On the group's business front these subsidiaries include Medical Cannabis Limited (MCL), T12 Holdings (hemp food and nutritional products), VitaHemp (T12's retail division), VitaSeeds (growing and cultivation of MCL's hemp products), Hemp Hulling Co (the manufacturing division for MCL's hemp products), and Medical Cannabis Research Group.
The company has key joint ventures with PharmoCann, and Canntab to manufacture and distribute products. Cann Global is also in partnership with MedCan Australia and Bio Health for the cultivation, export, and manufacture of medicinal cannabis products in Australia.
On the research front Cann Global's subsidiaries Technion and VitaCann are looking into how medicinal cannabis can help those that suffer from multiple sclerosis, autoimmune diseases, epilepsy, and chronic pain.
Cann Global's executive chairman Pnina Feldman says 2018 was a transformative year for the company, as tough as it was.
"2018 was a year of challenges and triumphs," says Feldman."The boardrecognised that in order for the company to grow, we would need to undertake a re-compliance to satisfy the listing requirements of the ASX and to formally recognise, that the majority of our new business activities were focused on the development of our hemp and medicinal cannabis entities."
Uniquely, Australia's cannabis businesses that play in the cultivation and R&D spaces are simultaneously pharmaceutical and agricultural companies. This means that Australia's tough weather conditions over the last year have come down hard on Cann Global too.
The drought affecting the eastern states left Cann Global in the lurch, but Feldman assures shareholders that there are early signs of good crops so far in 2019.
The company has been busy during its period away from the ASX.
On March 29 the company formalised an agreement with Bio Health Pharmaceuticals. The deal is intended to significantly move forward the pair's production timetable but resulted in Cann Global having to request a delay in relisting.
Cann Global is expected to relist on the ASX on 8 July 2019.
Business News Australia
Author: David Simmons