- AusCann (AC8) has finalised the sale of its 50-per-cent-owned Chilean joint venture to GrowForChile (GFC) and Telor International
- The company has received US$500k (approximately A$648,000) for the sale so far with further payments equaling US$1 million (approximately A$1.3 million) expected over the next two years
- The joint venture, DayaCann, was formed in 2016 between the Australian-based pharmaceutical company and Chilean company, Fundación Daya
- Its aim was to become a leading medicinal cannabis group in Latin America
- However, the Chilean government has restricted the supply of cannabis to patients and hasn’t approved for medicinal cannabis to be exported out of the country
- It’s hoped the sale will enable AusCann to strengthen its capital position and focus on building value through research and development
- Specifically, AusCann’s current focus is on its hard-shell capsules, which are already on the market
- Shares are in the grey at 15 cents each at 1pm AEDT
AusCann (AC8) has finalised the sale of its 50-per-cent-owned Chilean joint venture to GrowForChile (GFC) and Telor International.
The sale includes the company’s right, title and interest in DayaCann and the transfer of the company’s loan.
AusCann has received initial payments equaling US$500,000 (approximately A$648,000) with an additional two payments totalling US$1 million (approximately A$1.3 million) expected over the next two years.
The joint venture, DayaCann SpA, was formed in 2016 between the Australian-based pharmaceutical company and Chilean company, Fundación Daya.
DayaCann aimed to become a leading medicinal cannabis group in Latin America.
It was the only commercial-scale medicinal cannabis cultivation company in Chile that obtained a production licence. The licence allowed it to complete multiple harvests that yielded over 1000 kilograms of dried cannabis flower.
However, the Chilean government has since restricted the supply of cannabis to patients and hasn’t approved for medicinal cannabis to be exported out of the country.
Consequently, AusCann has decided to focus on other high-value cannabinoid-based pharmaceuticals to treat unmet medical needs.
Plans for the sale were announced in November last year, with AusCann Non-Executive Chairman Max Johnston thanking joint venture partner Fundación Daya in Chile and wishing them well for the future.
“The difficulties posed by the Chilean regulators combined with the move by AusCann away from cultivation made the DayaCann joint venture not viable to continue,” he said.
With the sale finalised, AusCann is able to strengthen its capital position and focus on building value through research and development. Specifically, AusCann’s current focus is on its hard-shell capsules, which are already on the market.
Shares are in the grey at 15 cents each at 1pm AEDT.