The Cann Group Ltd (ASX: CAN) share price has wobbled in morning trading on news the medicinal cannabis company received a tax refund for its research and development (R&D).
In early trade, the Cann Group share price was up as high as 70 cents. However, the price has since dropped 2.26% to currently trade at 65 cents.
What did Cann Group announce this morning?
In a release to the ASX this morning, Cann Group revealed it had received a $3.2 million tax refund for its R&D initiatives in the 2020 financial year.
Tax offsets are offered by the Australian government to businesses for certain R&D investments. Cann's refund includes activities conducted by the company through partnerships with strategic research entities.
Cann reported it will reinvest the fund into the continued development of its expansion, commercial activities and product portfolio.
Commenting on the news, Cann Group CEO Peter Crock said:
The refund that we have received under the R&D tax incentive program is an indicator of the company's commitment to research in the medicinal cannabis sector.
We've recently conducted a close review of these R&D programs to ensure we are prioritising our investment appropriately and will continue to see meaningful and beneficial outcomes from these activities.
Company snapshot
Cann Group breeds, cultivates, produces, and manufactures cannabis for medicinal and research purposes. The company has established R&D and cultivation facilities in Australia to facilitate the supply of medicinal cannabis for a range of diseases and medical conditions.
Cann was the first company to be issued with a cannabis research licence by the Australian Federal Department of Health's Office of Drug Control in February 2017. Shares of Cann first began trading on the ASX in May 2017.
About the Cann Group share price
The Cann Group share price is off to a strong start in 2021, up 14% since the opening bell on 4 January.
2020 saw shares also take off in the early weeks of trading, with the share price gaining more than 92% by 20 January. From there things went largely downhill, with shares plummeting 82% through to 20 November. Having begun to recover from the COVID-19 selloff, shares were put under renewed pressure in July when the company conducted a capital raising at a 50% discount to the share price at that time.
Things took a turn for the better in November when the company received approval for a $50 million debt facility from the National Australia Bank (ASX: NAB). Cann is using the funds to complete the first stage of its production site outside of Mildura, Victoria.
Over the past 12 months, the Cann Group share price is down 22%.
For comparison, the All Ordinaries Index (ASX: XAO) is up 1% in that same time.
