Cann Group’s [ASX:CAN] share price increased by over 16% last week, on news of securing a site for Cann’s proposed stage 3 medicinal cannabis cultivation and GMP manufacturing facility.
The medical cannabis producer’s shares increased a further 2.29% upon opening this morning — currently trading at $3.58.
Cann is the first Australian company focused on breeding, cultivating and manufacturing medicinal cannabis for sale and use within Australia.
Cann Group secures Australia’s largest medical cannabis operation
Cann announced last week that it has signed a heads of agreement with Australia Pacific Airports Melbourne Pty Ltd (APAM), securing the site of their proposed stage 3 medicinal cannabis operation.
The five hectare site allows for Australia’s largest state-of-the-art medical cannabis operation, being part of the 2,500 hectares of available land within the Melbourne Airport precinct.
Under the lease agreement APAM proposed to fund and manage the primary build of the facility, representing a multi-million dollar contribution. Upon completion, Cann will be responsible for the completion of the construction, including the fit-out and technology deployment required.
The facility is being designed by Aurora Larssen Projects, a greenhouse engineering specialist consultancy. While details are still to be confirmed, it is estimated that Cann will invest a total of $100 million, employing 170 staff.
Late last year, Cann successfully completed a capital raising for the project, and will use a combination of debt and equity to fund the new expansion.
Cann Group’s CEO, Peter Crock, said that with the support of APAM they are in a strong position to embark on its stage 3 expansion.
‘APAM’s contribution to the construction of these facilities will enable Cann to invest additional capital in increased cultivation capacity; expanded development and production capabilities, while also allowing for further future expansion.
‘As per our ongoing strategy, the facility provides Cann with the necessary scale to compete on the global stage in the medicinal cannabis sector.’
APAM’s chief of property, Linc Horton, said that their decision to lease the site to Cann is consistent with their strategy.
‘To attract high quality tenants that not only contribute to the long term objectives of the business, but seek to connect Victoria’s technology industry to the rest of the world.’
What’s next for Cann group?
Although Cann currently has little revenue, this agreement demonstrates the future growth plans of the medical cannabis producer.
The site allows for a substantially larger facility than anticipated, which will make Cann Group Australia’s largest state-of-the-art medical cannabis operation.
Cann’s share price has increased by over 438% since its original listing price of 66 cents in May 2017. Despite being a speculative market, Cann Group seems to have secured investors’ confidence. This might be a stock worth keeping an eye on.
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