AusCann steps up medical cannabis growing operation in Chile

AusCann ASX AC8 medical cannabis second harvest Chile
AusCann’s Chilean JV DayaCann has completed its second harvest yielding 620kg of dried cannabis buds.

Medicinal cannabis commerciality continues to bloom in all continents, as South America adds its voice to growing calls for public acceptance of medical cannabis as a viable treatment option, already being put forward by countries such as the US, Canada, Germany and Australia.

Pharmaceutical company AusCann (ASX: AC8) is looking to march forward in the evolving medical cannabis landscape globally with news that it has completed its second harvest in Chile.

Its operations in the South American country are being conducted in tandem with Chilean-based joint-venture partner Fundación Daya.

The two companies formed an equal partnership to create DayaCann in 2016 and planted their first crop in May 2017.

Building a medical cannabis hub in South America

Daya is a non-profit organisation based in Santiago with the stated objective of conducting “research and promotion of alternative therapies aimed at relieving human suffering as well as advising on the design of public policies.”

Daya remains the only company to hold a growing licence for medical cannabis in Chile and was the first group in South America to receive such approvals in 2014 with subsequent licences being granted in 2015 and 2016.

AusCann reports that its Chilean growing operation has now produced its second crop yielding 620 kilograms of dried cannabis product, an increase of over 50% on the 400 kilos yielded from its first crop last year.

DayaCann planted the second crop at the end of 2017 using the superior strains selected from the first crop.

This equates to a yield of approximately 1.2 tonnes per hectare with future crop yields potentially seeing further increases as further operational improvements are implemented.

DayaCann is currently operating a 30-hectare facility in the south of Santiago which features an open greenhouse with the capability of growing multiple strains for various cannabinoid profiles.

From a commercial perspective, AusCann hopes to monetise its crop by producing high quality clinically validated cannabis medicines to be distributed across South America.

AusCann sees the South American market as internationally significant following recent legislative changes in Argentina, which has joined Chile, Colombia and Uruguay in legalising medical cannabis for therapeutic purposes.

As part of their joint-venture partnership, Fundación Daya has been tasked with spearheading progress through local regulations given the company’s strong public policy influence and close access to policymakers.

The Chilean company has worked with the Chilean National Institute of Public Health to establish a special access scheme similar to the one in Australia which enables patients in Chile access to local medicinal cannabis products – to be manufactured from Auscann’s harvested production.

In addition to its operations in Chile, AusCann says it is doing further work as part of other global relationships to supply cannabinoid-based medicines.

The company currently works with Canada’s largest medicinal cannabis group, Canopy Growth Corporation, and Europe’s leading cannabis breeding company Phytoplant. The formulations supplied by Canopy Growth Corporation are already being used among an existing patient base of 24,000, according to AusCann.

Incorporated in 2014, AusCann is currently the only ASX listed company with the full set of necessary licences to grow and manufacture cannabinoid medicines in Australia.

The company is initially targeting medications for neuropathic and chronic pain in Australia and Chile but is also actively exploring global export opportunities as legislative changes allow.

In the past few years, medical cannabis has been steadily welcomed back onto physician treatment radars as legislation has softened in numerous countries across all continents.

Countries such as Canada, the US, Germany and Australia have taken the lead in making tangible legislative headway in reintroducing medical cannabis back into viable government-sponsored treatment options for a huge variety of ailments and diseases.

George is an award-winning market analyst who has authored articles and editorial opinion pieces for multiple publications around the world. He has written about a wide variety of topics including financial markets, stocks, trading, politics and economics.