Medical cannabis producer, Cann Global (ASX: CGB) is set to expand their operations in Asia after launching a new Asian-based subsidiary, allowing them to cultivate and process cannabinoid products in South-East Asia.
By commencing operation in south-east Asia, the Company is best positioned to capitalise on conditions which are ideal for outdoor growing, which may enable low production costs associated with the production of their cannabinoid products.
The licensing arrangement with Sun Agriculture Promotion Industry And Commercial Co (SUN), provides that they will grant Cann Global Asia (CGA) permission to cultivate and process hemp products. Under the agreement, SUN will export the products for CGA when requested and CGA will pay 10% of their total profits from the products to SUN, with implementation activities expected to begin next month.
Cann Global Managing Director Sholom Feldman said, “CGB recognised that with many new companies coming onto the market in the Industrial hemp and CBD/THC Cannabis sector that it would be ideal, in addition to our current successful Australian operations, to expand our current business operations to include an established cultivation business in Asia that should be able to produce quality raw stock at even lower per gram pricing in order to be even more competitive in this new and burgeoning medical Cannabis and industrial Hemp industry.”
Previously trading on the ASX as Queensland Bauxite, the Company underwent a re-brand in January 2019 to reflect their cannabis business interests and then re-listed on the ASX in August 2019 as Cann Global Limited.
The global legal cannabis industry was estimated to be worth $US13.8b globally last year, with further projections expected to grow at a CAGR of 23.9% over the next 6 years to US$66.3b (Grand View Research).
As operations expand in Asia, Can Global has flagged a potential independent ASX listing for Cann Global Asia, with CGA reportedly seeking licenses in Cambodia and Thailand also. Shares in Cann Global spiked up to approximately 8% higher than Friday’s close price of 0.024, indicating a confident reaction from the market.