The Althea Group Holdings Ltd (ASX: AGH) share price is out of form on Wednesday despite the release of a positive announcement.
In morning trade the cannabis company's shares are down 2% to 49 cents.
Why is the Althea share price dropping lower?
Investors have been selling the company's shares this morning despite it announcing that a major regulatory change has been confirmed in Australia. This change is in relation to the status of cannabidiol (CBD) in Australia.
According to the release, the Therapeutic Goods Administration (TGA) has issued its final decision on proposed amendments to the Poison Standard. These amendments will see a new Schedule 3 (Pharmacist Only Medicine) entry created for CBD.
The date of effect of the decision is 1 February 2021, which is much sooner than the original anticipated date of 1 June 2021.
What does this mean?
The amendment will allow CBD to be supplied for therapeutic use under a new Schedule 3 entry.
This new cannabis channel would allow Australian patients to purchase CBD products over the counter upon consultation with a pharmacist, without the need for a prescription.
In addition to this, the final decision includes a modification to the dose specified in the interim decision. It has been increased from 60 mg/day, up to 150 mg/day.
Althea believes the decision paves the way for its top selling full-spectrum CBD product, Althea CBD100, to be made available under Schedule 3. It is currently sold under Schedule 4, which makes it a Prescription Only Medicine.
Management commentary.
Althea's CEO, Josh Fegan, commented: "We applaud the TGA's final decision in this matter and are glad to see the administration listened to industry following the interim decision, and subsequently decided to increase the maximum recommended daily dose acknowledging that this dose is consistent with the expected safety profile of a Schedule 3 medicine.
"The final decision follows the Company's announcement to shareholders that it had raised additional working capital, through an institutional placement, with a portion of those funds allocated towards the product development and registration of a range of CBD products for the potential Schedule 3 market in Australia. This decision provides confirmation of that marketplace and the Company can now proceed with its plans to have over the counter Althea products available for Australian patients in 2021," he added.
