2 Canadian Cannabis Companies Expand Into Australia
Two Canada-based cannabis companies announced updates Wednesday regarding their Australian operations.
Cannabis oil producer MediPharm Labs Corp. (OTC:MLCPF) said it signed its first deal to export cannabis oil to the land down under, while MYM Nutraceuticals Inc. (OTC:MYMMF) announced the first phase of a medical marijuana outdoor cultivation operation.
MediPharm Labs said it has entered into its first definitive international sales agreement with AusCann Group Holdings. Under the terms of the agreement, MediPharm will supply private-label, purified, pharmaceutical-grade cannabis oil concentrates or resin for export to Australia. AusCann will use MediPharm Labs' concentrate to manufacture cannabinoid capsules. Since receiving its sales license in November, MediPharm has completed five private label sales agreements.
MYM Nutraceuticals said it established the Gold Coast, Queensland-based company MYM Australia, which will develop an outdoor cultivation facility. As the first phase, MYM Australia said it will develop 50 hectares in New South Wales and over the coming years will develop another 350 hectares. The project will be developed in partnership with CPRSX Holdings.
MYM Nutraceuticals' wholly owned subsidiary will own 75 percent of the project and CPRSX will own the other 25 percent.
Why It's Important
Australia legalized medical marijuana in 2016. ABC News has recently reported that between March 2018 and January 2019, the Therapeutic Goods Administration issued more than 3,100 prescriptions for medical weed.
ABC also pointed out that there are likely 100,000 Australians that are self-medicating with weed acquired on the black market.
For MediPharm Labs, the supply agreement with AusCann Group Holdings marks a major milestone, as it's the company's first international supply agreement. Moreover, it's marks the first export by a Canadian extraction-only company to Australia.
MYM Nutraceuticals will not only be able to penetrate the emerging Australian cannabis market, but also expand its presence in the Asia-Pacific region. Last year, the Australian government allowed exports of medical marijuana, becoming one of a handful of countries to do so.
In December, New Zealand's government passed a law to ease access to medical marijuana for a broader number of patients.
The country plans to hold a referendum to legalize recreational weed in 2020, meaning that MYM's establishment of a cultivation facility in Australia could potentially allow the company to tap into the neighboring market.
Australia is likely to legalize recreational weed in the not-so-distant future, and it could potentially become an important market for cannabis companies. New Frontier Data estimates that the Ocenia cannabis market — both legal and illegal — is worth $5 billion.
In 2010, Professor Jan Copeland, the director of National Cannabis Prevention Information Center, said 750,000 Australians were smoking weed weekly and 70 percent of people ages 20-29 have tried it at least once.
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