AusCann Group (ASX: AC8), a leading Australian medicinal cannabis company, has announced a Heads of Agreement (HoA) with ASX-listed Australian Pharmaceutical Industries Limited (ASX: API).
The deal will see API distribute AusCann’s cannabinoid medicines throughout Australia and establish long-lasting distribution channels for the supply of AusCann’s medications to Australian patients.
News of today’s HoA saw AusCann shares start trading 7% higher around $1.75 per share at market open on Monday morning, as analysts factored in AusCann’s now-improved access to an extensive pharmacy network and an accelerated distribution strategy.
The agreement means AusCann will have access to improved infrastructure and could potentially see the company generate stronger sales revenues as a result of the deal.
As part of its overarching strategy, AusCann will distribute imported cannabinoid medicines from its Canadian partner, Canopy Growth Corporation, ahead of establishing its own local supply of medications. At the current time, AusCann is working closely with its strategic partner Tasmanian Alkaloids in establishing its cultivation and manufacturing operations in Tasmania, with the first crop expected to be planted later this year.
Since being founded in 2014, AusCann has been working towards producing high quality clinically-validated cannabinoid medicines to patients by introducing leading experts into its operations across all aspects of the medical cannabis value chain – beginning with cultivation and production, through to manufacture and distribution of final dose medications.
On the social side, AusCann is driving awareness of the therapeutic benefits provided by medicinal cannabis. Just recently, AusCann launched ‘Medical Outreach Program’, an initiative which provides education to Australian doctors, thereby helping to gradually re-introduce medicinal cannabis back into medicine and existing treatments.
“Establishing a relationship with a leading wholesale distributor in the industry provides AusCann with an excellent partner for the distribution of our medications and is further evidence of the growing market and validity of what we’re doing in Australia,” said AusCann Managing Director Elaine Darby.
“This relationship is in addition to our strategic partnership with Tasmanian Alkaloids, who we are working closely with to establish our growing and manufacturing operations. It further builds on our Australian supply chain and firmly positions AusCann as leaders in the local industry,” she added.