- AusCann (AC8) has entered an agreement with GrowForChile SpA (GFC) and Telor International to sell its interest in a Chilean joint venture company
- In 2016, AusCann and Fundación Daya formed a 50:50 joint venture company called DayaCann
- DayaCann is the only commercial medicinal cannabis company in Chile that held a production licence, allowing it to produce over 1000 kilos of dried cannabis flower
- Unfortunately, the Chilean government has restricted the supply of cannabis to patients and won’t allow it to be exported out of the country
- These restrictions have led AusCann to sell its interest — stating the joint venture is a non-core asset and isn’t viable to continue
- Nevertheless, the company will focus on other cannabinoid products, including its hard-shell capsules
- AusCann will receive an upfront payment of US$200,000 (roughly A$274,974) and further payments that amount to US$1.5 million (roughly A$2.06 million)
- Company shares are trading flat for 14 cents
AusCann (AC8) has entered an agreement with GrowForChile SpA (GFC) and Telor International to sell its interest in a Chilean joint venture.
The Australian-based pharmaceutical company holds a 50 per cent interest in DayaCann. The 50:50 joint venture company was formed in 2016 between AusCann and Chilean company, Fundación Daya.
DayaCann aimed to become a leading medicinal cannabis group in Latin America. To this date, DayaCann is 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.
Unfortunately, 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.
“The DayaCann joint venture became a non-core activity for AusCann due to the restrictions imposed by the Chilean government on the use and export of medicinal cannabis from Chile,” AusCann CEO Nick Woolf said.
This led AusCann to focus on other high-value cannabinoid-based pharmaceuticals to treat unmet medical needs.
“We thank our joint venture partner, Fundación Daya in Chile, and wish 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,” AusCann Non-Executive Chairman Max Johnston said.
For the sale, AusCann will receive an upfront payment of US$200,000 (roughly A$274,974) and further payments that amount to a total of US$1.5 million (roughly A$2.06 million).
The sale agreement allows AusCann to strengthen its capital position and to focus on building value through research and development. Specifically, AusCann’s current focus is on its hard-shell capsules which were launched this year.
Company shares are trading flat for 14 cents at 2:06 pm AEDT.