Jayex Healthcare (ASX: JHL) has announced the first market outing for its P2U script processing and BluePoint remote dispensing technologies, which involves securing a foothold in New Zealand’s embryonic medical cannabis market.
The company has signed a binding licence agreement with medical cannabis company MediCann NZ that paves the way for the medical cannabis grower to use Jayex’s technology in New Zealand in line with the country’s softening legislation.
Under the licence agreement, MediCann has committed to purchasing a minimum of five BluePoint kiosks in the sale and distribution of MediCann’s approved medical cannabis products in New Zealand. The deal could potentially involve other services over time.
The expected sale price for the five machines is approximately A$500,000, with additional fees for the software and the prescription processing to be agreed.
Furthermore, as part of the licensing deal, MediCann says it will form a new subsidiary named MC2U (Medical Cannabis 2 You), which will focus entirely on developing and modifying Jayex’s P2U software and the BluePoint kiosk/remote dispensing terminal solution.
The New Zealand Government drafted a Bill last year which (if enacted) is expected to come into effect in late 2018 or early 2019 and allow the regulated prescribed use of medical cannabis in the country.
MediCann is aiming to establish a strong foothold in the country’s medical cannabis market that currently remains in its embryonic stages, much like other countries that have recently turned the tables on existing legislation. Namely, the UK, the US, Canada and Germany have emerged as the world’s front-runners to seeing both medical and recreational cannabis use legalised.
Partnering up with MediCann is a significant step for Jayex and opens the door for the company to grow this relationship alongside the organic growth of medical cannabis in world markets.
MediCann is an unlisted New Zealand public company, co-founded by Ross Smith, a New Zealand citizen and acknowledged global expert in medical cannabis. Mr Smith has signed a consulting agreement with Jayex that will see him advising the company regarding commercialising the P2U and BluePoint technologies for medical cannabis distribution in association with MediCann in New Zealand. The scope already exists for Mr Smith to assist Jayex with respect to similar opportunities in Canada, certain states in the US, Australia and the UK.
MediCann’s board also includes Dr Franz Strydon, a noted New Zealand medical practitioner and skin cancer specialist, as chairman, and Elizabeth Plant, a noted pharmacist in New Zealand, and the former President of the NZ Pharmaceutical Society for five years.
MediCann has recently completed its first private capital raising in New Zealand and is now implementing its business plan. One of the major new milestones is to complete a development program that includes the assimilation of Jayex’ technology.
According to MediCann, it intends to raise additional funding sufficient for it to complete its development program and become a full-fledged medical cannabis producer in the coming years.
Market analysts expect New Zealand to finalise its legislative changes over the course of this year and thereby follow other Commonwealth countries such as Australia and Canada into welcoming cannabis back into treatment options recommended by doctors.
Once the legislative changes occur as expected in New Zealand, the MediCann business plan will involve large-scale commercial medical cannabis production in New Zealand, medical cannabis extraction, and production, sale and distribution in New Zealand of approved medical cannabis products.
As a result of today’s agreement with MediCann, Jayex’s share price rocketed more than 233% to reach A$0.10 by early afternoon trade.