ASX cannabis shares grow business despite coronavirus downturn

While the market has been distracted by the fallout from the coronavirus pandemic, ASX cannabis shares have been quietly expanding their businesses. We take a look at how three ASX cannabis shares are performing

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ASX cannabis shares have been hammered in the market downturn as investors turn to safe-haven assets. But while the market has been distracted by the fallout from the coronavirus pandemic, ASX cannabis shares have been quietly expanding their businesses.

So, let’s take a look at how three ASX cannabis shares are performing.

Auscann Group Holdings Ltd (ASX: AC8)

AusCann has made its hard-shell cannabinoid capsules commercially available and is commencing a clinical trial to evaluate their benefits. 

Clinical trial

Auscann announced this morning that it is set to commence a clinical trial of its hard-shell capsules, which are currently available for prescribing by authorised doctors in Australia. The trial will evaluate the pharmacokinetics of its hard-shell capsules at two different dose strengths, providing information to inform dose selection. 

All required approvals to run the study have been obtained, including ethics committee approval. Recruitment for the study will occur in April, with the study scheduled to start on 20 April. Developments around COVID-19 will be monitored and study timelines adjusted if required. 

CEO Ido Kanyon commented, “Auscann have developed standardised cannabinoid-based formulations in a dose-controlled capsule. The capsules have been tested in a lab setting and demonstrated to be reliable, stable and deliver a consistent controlled dose of the formulations. We are now excited to commence the clinical evaluation of the capsules to demonstrate the product’s benefits for patients.”

Commercial availability 

AusCann has made its dose-controlled capsules commercially available for prescription following interest from medical practitioners. Patients can access the capsules through the Therapeutic Goods Administration’s Special Access Scheme and Authorised Prescribers. 

Kanyon said, “we are extremely pleased to have reached this milestone and that our capsules are now available for prescription. These results will build the clinical evidence supporting the unique benefits of AusCann’s capsules, whilst enhancing the medical acceptance of cannabinoid-based medicines for patients in Australia.” 

Althea Group Holdings Ltd (ASX: AGH)

Yesterday, Althea reported significant progress across Australia, the UK and Canada, with March expected to be its highest revenue month in history.

Patient numbers growing

Althea added 617 new Australian patients in February with total patients exceeding 5,000. As at 28 February, 5,207 Australian patients had been prescribed Althea’s medicinal cannabis products by 440 healthcare professionals. 

The expanding patient base has resulted in increasingly growing recurring revenue from patients continuing to purchase Althea medication after an initial treatment period of 1-3 months. This, combined with strong uptake from new patients, means March is on track to deliver the most sales in a single month for the company. 

UK exports ramp up

Althea reported yesterday that it was shipping more product to the UK than ever before. The Home Office has changed import restrictions to ensure people with prescriptions for cannabis-based products do not have their treatment delayed or interrupted. 

Althea is now able to import larger quantities of cannabis-based product to the UK and hold supplies for future use by existing and new patients. Althea has shipped hundreds of units from Australia to the UK and has import licenses submitted to dispatch hundreds more. 

The Home Office changes are expected to improve lead times so that patients receive their medication within a matter of days, rather than weeks. A consistent supply of Althea products will provide confidence to both Health Care Professionals and patients in the UK. 

Peak Processing Solutions facility complete

Althea yesterday announced that practical completion of the Peak Processing Solutions facility in Ontario, Canada, has been delivered. The facility was delivered on budget with only a slight delay in the intended timeline. 

Practical completion means Peak can shortly submit remaining documentation required for the grant of its Health Canada licence. Following the granting of this license, Peak will have one of the first licensed cannabis processing facilities in Canada capable of manufacturing cannabis-infused products for consumer-packaged goods companies.

Coronavirus measures

Althea is monitoring the coronavirus situation carefully in terms of its impact on the company, the ability of health care providers to service patients, and patients’ access to medicinal cannabis products. 

The supply of Althea products is continuing as normal. The company is working closely with health care providers to minimise disruption to patients by promoting telehealth services, fast-tracking use of electronic prescriptions, launching online sales, and shipping products directly to patients’ homes. 

Notwithstanding current conditions, Althea intends to deliver on its responsibilities to patients and shareholders. The company has no debt, $1.8 million in inventory, and $15 million cash on hand. 

CEO Joshua Fegan said, “Althea provides an essential service to the community and we will continue to work with our many stakeholders to ensure our patients can access their medications in a safe and efficient way.”

Ecofibre Limited (ASX: EOF)

Ecofibre has been awarded a contract to supply hemp seed oil to Woolworths Group Ltd (ASX: WOW) and has plans to launch twelve additional health and beauty products.

Hemp food business

Ecofibre’s Australian activities are focused on its hemp food business (‘Ananda Food’). Its primary client is Woolworths where products are sold under the Macro health brand. The company has been awarded a contract to supply hemp seed oil for Woolworths Macro brand which will be introduced to all stores in September 2020.

Ananda Food is also launching a food-based nutraceutical line in the United States in April with a range of omega fatty acid products, protein supplements and activated hemp-derived charcoal cleansers. 

US business

Ecofibre’s main income business is Ananda Health in the US. Ananda Health has not so far been impacted by coronavirus as independent pharmacies constitute the major distribution channel. Twelve additional products that cover health and beauty ranges will be launched in October. 

CEO Eric Wang said, “Ecofibre continues to operate in a business as usual capacity. Ananda Health is working at full capacity and there are no breaks in supplying our customer needs. Despite recent market volatility, the Board and I maintain an extremely positive medium and long-term view on the business. We have taken all measures to ensure there is no break in supply for our patients who depend on our products for their health and wellbeing.”

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