AusCann partners with world's largest legal cannabis company

Australian medical cannabis company AusCann has announced a partnership agreement with Canada’s Canopy Growth Corporation, the largest legal cannabis producer in the world.

The partnership will see Canopy Growth offer its expertise in a number of areas, including production, quality assurance and operations, and provide strategic advisory services to AusCann, in exchange for an initial 15% ownership stake in the company as well as further options. AusCann and Canopy Growth will also aim to work together in Australian and international markets in a preferential but non-exclusive arrangement.

Describing Canopy Growth as “a global pioneer in the development of medicinal cannabis”, AusCann chief executive Elaine Darby noted that her company’s aim is to “establish the Australian medical community’s trust in these products and to produce high-quality, dependable, economical and clinically validated medicines”.

“This partnership is a massive step toward achieving that aim,” she said.

As part of the agreement, Canopy Growth founder and executive chairman Bruce Linton joins the board of AusCann, becoming part of a team that combines public health experts, policymakers and medically focused entrepreneurs. Linton said he was “very pleased to enter into this new international relationship — the first of its kind for a Canadian cannabis company”.

“As the Australian Government begins to lay out a framework for legal medical cannabis, AusCann has the same opportunities and challenges that [Canopy subsidiary] Tweed and its sister companies faced several years ago,” Linton said. “We have confidence that the Australian medical cannabis market will grow similarly to Canada and we think the lessons we learned in our early days will prove invaluable to the team at AusCann.”

The news has also been welcomed by AusCann’s would-be owner TW Holdings (ASX:TWH), with chairman David Wheeler saying TWH’s decision to purchase AusCann in March has been shown to be a sound one.

“Once again, it has been shown that AusCann is a best-of-breed company with a strong board and management team and significant international connections and deep relationships with market leaders,” said Wheeler.

“We look forward to finalising our deal to acquire AusCann as a great opportunity for TWH shareholders to participate in a unique and growing industry.”

The strategic partnership remains subject to final approval by the TSX Venture Exchange.

TW Holdings (ASX:TWH) shares were trading 33.33% higher at $0.012 as of around 1 pm on Monday.

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