AusCann Group Holdings (ASX: AC8) has acquired another one-year licence allowing it to cultivate cannabis crops at its 50%-owned facility in Chile.
The Chilean facility is held under a 50:50 joint venture between AusCann and Fundacion Daya and the duo, referred to as DayaCann, harvested more than 400kg earlier this year in its first successful crop, which was used to produce a range of chemotypes for developing trial formulations.
With this latest licence, DayaCann will immediately begin planting cannabis crops at its 30-hectare operation near Santiago in Chile. Harvesting is scheduled to be completed by mid-next year.
“Chile is one of the regions at the forefront of change and access to cannabis medications for patients is advancing rapidly in the region,” AusCann managing director Elaine Darby said.
“This licence allows us to commence growing our second crop in the region, building on our position in the market and expanding our supply chain as AusCann becomes a fully integrated medical cannabis company that will service both the Australian and Latin American markets,” Ms Darby added.
The Chilean Government only awards one-year licences for medical cannabis cultivation and DayaCann has managed to successful gain a licence each year for the past four years.
Fundacion Daya director of development Nicolas Dormas said growing another crop in the region would provide jobs for local people, particularly women, who he says have less access to job opportunities in the area.
Ms Darby said the Chilean government provides a supportive framework for medicinal cannabis companies across the value chain.
DayaCann’s strategy is to evolve into an integrated cannabis organisation producing cannabinoid medications. AusCann claims DayaCann has key advantages in the Chilean market as the only current licenced cannabis producer in the region.
According to AusCann, Chile’s patient demographics are similar to Australia and the joint venture is initially developing cannabinoid medicines for chronic pain.
Medical cannabis is also legal in nearby countries: Argentina, Brazil, Columbia, Mexico, Panama, Peru, Puerto Rico and Uruguay. As part of its growth strategy, DayaCann plans to branch out into these markets.
Based in Western Australia, AusCann is licenced for research and cultivation within Australia. The company also has a strategic relationship with Canada’s Canopy Growth, which is an AusCann shareholder.
Additionally, AusCann has other partnerships in place to draw on and assist the company from selecting the right cannabis strain to grow through to clinical testing and drug formulation.
AusCann has also begun cultivation at its Perth facilities in WA.
By early afternoon trade, AusCann shares were more than 18% higher at A$0.88 each.