Medicinal cannabis company Althea Group (ASX: AGH) has taken a significant step towards commencing work on its production facility and generating a commercial return from the emergent cannabis industry in Australia, after its wholly-owned subsidiary Althea Company was granted a manufacturing licence by the Australian Office of Drug Control (ODC), the country’s formal regulator of drugs and narcotics manufacturers.
According to Althea’s CEO, the licence grant serves as “further validation” of the company’s business model with Althea now keen to start work on its production facility and going on to develop a vertically integrated, seed-to-sale, state of the art medicinal cannabis operation, based in Victoria, Australia.
The licence provides Althea with authorisation to manufacture extracts and tinctures of cannabis and cannabis resin in accordance with relevant manufacture permits.
Althea listed on the ASX in September this year having raised almost $20 million with the intention of acquiring the necessary licences and permits to import, cultivate, produce and supply medicinal cannabis for eligible patients across Australia.
Production and education
Althea’s focus on patient care underpins its business strategy to provide a web-based platform and mobile application, known as Althea Concierge – a digital portal designed to educate and support patient access to medicinal cannabis in Australia.
Althea says it has also engaged a team of “medical science liaisons” to assist medical practitioners to become prescribers and pharmacists to become suppliers of its products.
The company has confirmed that through strategic supply and distribution partnerships, it has already commenced sales of five Althea-branded medicinal cannabis products in Australia.
“Coupled with the existing medicinal cannabis licence, Althea can now proceed with the next phase of planning for our Victorian-based production facility. Althea shareholders can look forward to a vertically integrated, seed-to-sale, state of the art medicinal cannabis operation, comparable to that of our Canadian partner Aphria,” said Josh Fegan, CEO of Althea Group.
Ontario-based Aphria is currently one of Canada’s lowest-cost producers and suppliers of medical cannabis. The company prides itself on harnessing natural growing conditions and developing “pharma-grade” synthetic-free produce.
As it stands, Aphria owns 25% of Althea Group – yet more confirmation of the growing trend of Canadian and Australian medical cannabis companies collaborating in order to achieve economies of scale and to create other synergies over time.
“The granting of our manufacture licence is patients approved for Althea medicinal cannabis products have quickly surpassed the recent 100 patient milestone, with 127 patients now approved. Similarly, the number of doctors prescribing Althea products has increased from 42 to 50 in the last two weeks,” said Mr Fegan.
Mr Fegan also declared: “And we are just getting started. Our aim is to reach 1,000 patients by this time next year and the comprehensive work we are doing educating mainstream doctors across Australia makes that a distinct possibility.”
Althea’s IPO is the latest in a long line of cannabis-focused ASX hopefuls.