Cann Group nets government tender to supply cannabis resin for children with epilepsy

Cann Group (ASX: CAN) has secured a deal with the Victorian government to supply cannabis plant extract, or resin, to be used to treat children with severe or intractable epilepsy.

The medicinal cannabis developer today announced it had been awarded the tender with the Office of Medicinal Cannabis, under the state’s Department of Health and Human Services (DHHS).

Although the commercial terms of the agreement remain confidential, Cann said the deal involves the supplied resin undergoing further purification and processing into a Victorian government medicinal cannabis product, which will be used to expand the government’s compassionate access scheme.

According to Cann chief executive Peter Crock, there is emerging medical evidence supporting the use of medicinal cannabis in children with severe cases of epilepsy.

“We are pleased to be working with DHHS in relation to the compassionate access scheme, which has been well received by patients and carers, with patient/carer reports of reduced seizures and improved quality of life,” he said.

Crock added that securing this contract, as well as the successful completion of more than 20 cannabis harvests this year at Cann’s northern and southern Melbourne facilities, were “testament to our reputation for high quality and reliable cultivation”.

The agreement covers the supply of resin from April 2019 through to the end of June 2020.

Teaming up with the CSIRO

Last week, Cann announced it had signed a three-year deal to extend its research and development collaboration with Australia’s national science agency, the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

The new umbrella agreement will see technology development activities undertaken for use in the commercial manufacture and sale of medicinal cannabis products.

Under the terms, all resulting intellectual property will be owned by Cann.

Crock said the outstanding facilities, skills and experience that CSIRO will contribute to the collaboration will complement the company’s ongoing commitment to building a science-based business.

“This agreement will enable us to investigate numerous opportunities across the medicinal cannabis technologies,” he said.

Other collaborations

Cann also has collaborative arrangements with other government departments in Victoria. In August, it signed a memorandum of understanding with Agriculture Victoria, which is part of the state’s Department of Economic Development, Jobs, Transport and Resources.

This department pioneered the cultivation of the cannabis plant and the development of an extraction process in Australia. According to Agriculture Victoria deputy secretary of agriculture research Professor German Spangenberg, the Victorian government is aiming to supply half of Australia’s medicinal cannabis by 2028.

Cann’s collaboration involves a set of research projects covering different areas of focus including medicinal cannabis cultivation, extraction, cannabis strain genome analysis and strain identification, accelerated precision breeding and development of novel and designer medicinal cannabis strains that will add to Cann’s intellectual property portfolio.

In June, the company signed a heads of agreement with Australia Pacific Airports Melbourne Pty Ltd to secure the site for its proposed stage three cultivation and manufacturing facility.

It also inked a manufacturing deal with IDT Australia (ASX: IDT) in August.

Cann shares rose 4.22% to $2.47 on today’s news by afternoon trade.