A cash-strapped medicinal cannabis grower is back trading on the Australian Stock Exchange.
Subscribe now for unlimited access to all our agricultural news
across the nation
or signup to continue reading
Share trading in the Mildura-based Cann Group was suspended back in March as questions were asked over the solvency of the company.
Almost seven million shares were traded in the company on its opening day last week to drive the share price down to its lowest ever point of about five cents a share.
Shares were trading at about 10 cents apiece at the start of the year.
Company chairman Dr Julian Chick advised the ASX today (Tuesday) he had bought 250,000 shares in the company for $10,000 and director Robert Barnes had bought 200,000 shares for the same price.
Turnover in shares has been much more subdued since trading opened again.
In a letter to shareholders last month, Dr Chick said the company believed it had now made the structural changes necessary to grow a "a robust and profitable cannabis business".
Dr Chick said the company had worked to cut costs by more than $2 million annually "without detriment to the overall business operations".
He said since the company's shares were suspended on the ASX, the company had worked to reduce operational costs and optimise revenue.
Auditors William Buck said in their report on the last half-yearly report, which triggered the ASX suspension, they had been unable to confirm the group's ability to secure the necessary finance to "support the group as a going concern" over the next 12 months.
Cann Group has since secured $5 million of debt funding, sold unnecessary assets and cut at least 11 jobs.
Dr Chick said the business was now "supported by cash flow forecasts demonstrating the business is self-funding for at least the next 12 months".
He said Cann's Mildura facility "remains a major asset".
"For Cann Group shareholders, all the pieces to make Cann a viable business remain in place with the team and facilities, so the focus is to execute our current plan and show shareholders and the broader market that we are a significant presence in the global medicinal cannabis market."
Cann Group's founding director and chairman Allan McCallum retired from the board in late August after nine years of involvement and was replaced by Dr Julian Chick as chair.
Deborah Ambrosini departed as chief financial officer in late December to be replaced by Tony Di Pietro starting in April.
Later in March, Cann Group's chief executive officer Peter Koetsier announced he was quitting for family reasons.
Mr Koetsier finished up last week and is being replaced by director Jenni Pilcher.
The suspension of trade earlier in the year came after Cann Group reported a net loss of $14,338,000 in the first six months of last year on the back of an almost $19 million loss the period before.
Cann Group is an Australian-based company working to develop, produce and supply innovative cannabis medicines.
It has received the support of various government authorities.
Victoria has been aiming to become Australia's home of cannabis production with investments in Mildura, Melbourne and Shepparton.
Established in 2014, Cann Group began with two medicinal cannabis processing facilities based in Melbourne and in 2019 entered an agreement with the Mildura Rural City Council over the purchase of a $10.75 million site to locate a greenhouse and production facility.
The Mildura operation includes glasshouses and 12,000 square metres of processing and manufacturing facilities.
The greenhouse development was to cost $130 million.
It was the first company to be issued with a Cannabis Research Licence by the government's Office of Drug Control in February 2017.
In March that same year, Cann Group was issued Australia's first Medicinal Cannabis Cultivation Licence, which authorised Cann to produce Australian-grown cannabis (in association a relevant permit) for medicinal purposes.
Cann Group said it hoped it would be able to cultivate up to 50 tonnes of medical cannabis in dried flower form a year.
The ASX was told last month, Cann Group is now involved in legal action with New Zealand biotech company Rua Biosciences Ltd over a manufacturing and supply agreement which Cann Group says it will defend "vigorously".
Rua Bioscience is claiming damages for an alleged breach of contractual rights to exclusively sell Cann's medicinal cannabis products in Australia.