Queensland Bauxite (ASX: QBL) has announced a “materially strategic transaction” through its subsidiary Medcan Australia, a company it will soon fully acquire as part of a deal struck earlier this year.
Earlier today, Medcan Australia said it had entered into a memorandum of understanding (MoU) with prominent Israeli medicinal cannabis company Pharmocann, considered one of the world’s foremost and experienced cannabis growers, that will see Medcan manufacturing Pharmocann’s range of products under a 50/50 JV for Australian and global markets.
The MoU follows on from Medcan securing its Medical Cannabis Manufacturing License and Export License from the Office of Drug Control and is partly related to the fact that Israel currently does not allow export of medical cannabis products.
Pharmocann wants to commercialise its expertise and intellectual property and is targeting newly-created markets such as Australia – currently experiencing significant legislative easing as the Australian government seeks to follow the lead of other developed nations in allowing access to medicinal and recreational cannabis use.
Earlier this week Canada became the first G20 nation to legalise recreational cannabis use and supplements earlier moves by the US, Germany and the Netherlands, to ease existing prohibition.
Each country has taken a slightly different approach towards easing access to a drug which remains prohibited in the clear majority of other nations globally.
Israeli expertise exported to Australia
According to Queensland Bauxite “Pharmocann is recognised as being amongst the world’s foremost and experienced cannabis growers, with their own proprietary products, intellectual property (IP) and expertise that will be of significant benefit to the Australian and global markets.”
The Israeli company is currently fully registered in Israel to develop and grow medicinal cannabis in GAP standard greenhouses, but also, to supply medical cannabis products throughout Israel.
For over 10 years Pharmocann has supplied more than 4,500 registered patients medicinal cannabis dried flower, oils and ointments and has actively developed a range of medicinal cannabis products which the company is now in the process of validating via human clinical trials in Israel.
“We are excited to have finally entered into this MOU with Pharmocann after being in detailed discussions with them since early 2017,” said Craig Cochran, CEO of Medcan Australia.
Mr Cochran added that “Pharmocann is one of the top Israeli medicinal cannabis companies and have developed a unique range of products which are showing extraordinary results in clinical trials.”
Via its Medcan subsidiary, Queensland Bauxite wants to leverage high-quality products manufactured by Pharmocann and to harness its expertise to provide an industry-leading product that could potentially provide the company with a leading position amongst a troop of cannabis producers currently in the process of setting up shop in Australia.
“The addition of Pharmocann’s skill set and product range further builds on the expertise and product offering of the QBL group. With a huge international market for medicinal cannabis products we believe this JV will be of a major benefit to QBL’s shareholders,” said Pnina Feldman, chairperson of Queensland Bauxite.