Within a week of listing on the ASX an Australian medicinal cannabis joint venture (JV) backed by a Canadian colossus has signed a distribution deal with Sigma Healthcare (ASX: SIG).
The agreement will see Cronos Australia's (ASX: CAU) imported 'PEACE NATURALS' medicinal cannabis products distributed nationwide through the Melbourne-headquartered company's retail network which includes Amcal+ and Guardian Pharmacies.
The parties expect further products and brands will be brought under the arrangement over time.
Cronos' launch on the ASX has been difficult in light of a circumspect environment for medicinal cannabis stocks. The group was aiming to hit an IPO price of 50 cents a share, but it has only reached a high of 42 cents.
CAU shares opened at $0.32 this morning and have fallen by around 5 per cent to $0.295 each at 11:15am AEDT.
Cronos, a 50:50 JV between Canada's Cronos Group and NewSouthern Capital, remains optimistic about its prospects in the Australian market.
"The Distribution Agreement marks a significant milestone in the Company's route to revenue, enabling the distribution and sale of PEACE NATURALS medicinal cannabis products that are expected to be imported by the Company," the company said.
In other news in the space, one of Australia's largest listed cannabis companies Elixinol (ASX: EXL) had to explain itself to the market operator after a drastic share price fall of more than 30 per cent over the course of this week.
Elixinol told the ASX it was not aware of anything that had not been released to the market which would explain the recent trading.
However, it did reference an announcement from 23 October about non-compliance for its Japanese subsidiary, but could not confirm whether this was the cause.
"An independent investigation into this matter remains ongoing. Elixinol is also currently finalising its assessment of the commercial viability of the Elixinol Japan business and will update the market as soon as a determination has been made.
EXL shares rebounded by more than 10 per cent after the clarification was made.
Business News Australia