Cann Group and IDT Australia prepare for commercial launch of medicinal cannabis product

Cann Group ASX CAN IDT Australia medicinal cannabis
IDT Australia has packed Cann Group's medicinal cannabis dried flower ahead of next year's commercial launch.

Cann Group (ASX: CAN) has confirmed the first commercial medicinal cannabis product to be made at Cann’s Australian-based cultivation operations has been packed by IDT Australia (ASX: IDT) in preparation for commercial release in the new year.

Medicinal cannabis dried flower has now been packed into 10 gram bottles by IDT and will undergo stability testing next month prior to its launch to Australian patients who have been approved under the Therapeutic Goods Administration’s Special Access Scheme for medicinal cannabis treatment.

While the product will initially address domestic requirements, Cann is also developing potential overseas pathways, recently completing its first export of Australian-grown and packaged medicinal cannabis dry flower to strategic Canadian partner Aurora Cannabis Inc.

Cann and IDT have an agreement in place for IDT to provide services and support to convert Cann’s medicinal cannabis into active pharmaceutical ingredients and product formulations.

Distribution agreement

Last month, Cann secured a contract with Symbion Health to distribute the product via Symbion’s network of 4,000 retail and 1,300 hospital pharmacies throughout Australia.

On signing the agreement, Cann chief executive officer Peter Crock said the company was entering its commercialisation phase, having successfully established a reliable cultivation and production capability.

“We are operating our existing Southern and Northern production facilities at full capacity, with in excess of 40 harvests now completed, and we are advancing our product manufacturing capabilities with IDT,” he said.

Cannabis commercialisation

Mr Crock said the manufacturing of locally-sourced product represents a significant milestone in the commercialisation phase of Cann’s business.

“IDT has demonstrated a clear capability to manufacture cGMP medicinal cannabis products,” he said.

“As [we] increase our cultivation and production capacity, it is critical we have the ability to efficiently convert that material into commercial formulations.”

Mildura review

Meanwhile, Cann is still assessing the “most appropriate construction schedule” for its new production facilities at Mildura after Aurora announced this year a delay to its planned expansion facilities in Canada and Denmark until market supply and demand is more balanced.

The economic case which supported the construction of Cann’s 70,000 kilogram capacity facility was underwritten by an offtake agreement with Aurora, whereby Aurora had first option to purchase product produced at Mildura in excess of that required to meet Cann’s domestic market.

Pending the outcome of a review and subject to having an appropriate funding package and necessary approvals in place, Cann’s hopes to develop an initial stage facility targeting a 25,000kg capacity, with commissioning to start by the end of 2020.

“Given the context, it is only prudent that we carefully assess the appropriate staging of construction to help ensure capacity is aligned to global demand and is delivered on a basis that reflects a responsible use of shareholder capital,” Mr Crock said.