Melbourne medicinal cannabis company debuts on the ASX with $19.65m IPO
Written on the 21 September 2018 by David Simmons
There's certainly no shortage of medicinal cannabis stocks to invest in on the ASX, and with today's listing of Althea (ASX: AGH) we're certainly spoilt for choice.
The Melbourne-based medicinal cannabis company launched on the ASX on Friday morning after a hugely successful and heavily oversubscribed IPO of $19.65 million.
Althea, which specialises in importing, cultivating, producing and supplying medicinal cannabis for eligible patients across Australia issued 98.25 million new shares at $0.20 per share during the IPO, giving the company a market cap of $40.6 million on listing.
Althea has been supplying patients in Australia since May, making it the first Aussie company to do so.
Thanks to its strategic partnership with Canadian giant Aphira, Althea commenced importing and supplying five Althea branded medicinal products to eligible patients in cannabis oil and dried flower form back in May.
Aphira, one of the largest medicinal cannabis companies listed on the Toronto Stock Exchange, took a cornerstone position in the IPO, and now holds 25 per cent in Althea.
CEO and MD of Althea, Joshua Fegan, says the company is hyper-focused on patients outcomes.
"Our aim is to educate and support patient access to medicinal cannabis in Australia," says Fegan.
"Our measured three-stage growth plan supports Althea's vision to become a leading and trusted medicinal cannabis brand in Australia."
Althea's three-stage business model involves early revenue generation, sales driven growth, and scalable domestic production.
The company has even engaged a team of medical science liaisons who are working to assist medical practitioners to become prescribers, and pharmacists to become suppliers, of Althea products.
The company will put the $19.65 million raised in the IPO toward brand awareness initiatives, and fund the design, construction, and commissioning and completion of a 4,080sqm medicinal cannabis cultivation, extraction and manufacturing facility in Skye, Victoria. The facility is expected to product approximately 3 tonnes of cannabis each year.
"Looking ahead, we intend to double down on our medical education program and leverage technology to build a greater understanding of medicinal cannabis for patients and healthcare professionals through Althea Concierge, our web-based platform and free-to-download mobile app," says Fegan.
Author: David Simmons