After obtaining its necessary cannabis exporting licenses, a Canadian producer will begin shipping medical marijuana oils to Australia.
On Tuesday (July 2) Aleafia Health (TSX:ALEF,OTCQX:ALEAF) announced that starting in August 2019 it will begin shipping its own branded medical cannabis oils to CannaPacific, its Australia-based partner, for distribution in the Australian market.
Aleafia Health owns a 10 percent stake in the Macleay Valley-based licensed producer.
As part of the new permit from Health Canada, the cannabis producer can also export medical cannabis extract products such as drops and sprays.
“We continue to prove the international viability of our highly differentiated cannabis health and wellness ecosystem with products, clinic operations, education and distribution,” Julian Fantino, Aleafia Health Chairman, said in the press release.
“With among the largest cultivation and extraction footprints in Canada coming online, we will continue to look to new international markets,” Fantino added.
Joshua Dennis, CEO of CannaPacific, said in a statement that the export license represented a significant milestone for the rapidly accelerating partnership between the two cannabis firms.
In a report published in 2018, New Frontier Data indicated that, while Australia represents one of the biggest cannabis markets in terms of revenues for the region, the medical space there is still in its infancy.
The research firm projected that the Australian medical base could grow to 330,000 patients by 2025, which would represent 1.2 percent of the country’s total population.
A projection from Statista places the value of the Australian medical cannabis market at AU$1.2 billion by 2024, up from AU$17.7 million in 2018.
In 2018, Health Canada said exports of medical cannabis product grew to 1,460 kilograms for dried flower and 920 liters of cannabis oil, according to a report from Marijuana Business Daily.
So far in 2019, the exporting of medical marijuana products from Canadian producers has continued to grow. Health Canada reported that 340 kilograms of dried flower and 195 litres of cannabis oil were exported during the first quarter of the year.
Aleafia Health confirmed its investment in CannaPacific in November 2018. At the time, Dennis said the synergy between the two marijuana firms would capitalize on the emerging Australian medical market. The transaction closed in January 2019.
As part of its most recent quarterly results, the Canadian firm reported a net loss of C$20.2 million for Q1 2019, mainly attributed to a one time payment from the closing transaction for acquiring its fellow marijuana producer Emblem.
As of 3:49 p.m. EDT on Tuesday, shares of the Canadian cannabis producer rose just over 3 percent for a price per share of C$1.36. Aleafia Health reached the Toronto Stock Exchange in March 2019. The Toronto-based company does not have an Australian Stock Exchange listing.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.