Australia’s first medical grade cannabis company, PhytoTech, has started trading on the ASX this afternoon.
The Perth-based company easily raised $5.9 million (at 20 cents per share) in an initial public offering last year.
PhytoTech lodged its prospectus in November and had hoped to list before Christmas, but was delayed when the ASX requested assurances about the legality of its products.
The company wants to develop medical grade cannabis products and new treatments to help those suffering conditions such as chronic pain.
It will grow proprietary strains of cannabis in California and Uruguay, and sell into regulated cannabis markets in North America, Israel and Europe.
The company has partnered with Israeli technology transfer firm Yissum, which has over 8,000 registered patents.
Non-executive chairman Peter Wall said the partnership is integral to PhytoTech’s operations, ‘Yissum’s experience in product and technology development is market leading.’
PhytoTech listed at 32 cents and has reached up to 37 cents.
Chris Weston from IG Markets said it is an exciting sector to be in.
“If you look at some of the US cannabis players, most have seen fairly stable and positively trending price action of late,” he observed.
Mr Weston said investors who took part in the float have had a great day.
“Whether some chose to stag the open is yet to be seen as price seems to be holding in … From an investment perspective the company has cash and a reasonable asset base,” he said.
“Bear in mind the market cap is still only $16, having effectively doubled today, so I wouldn’t be putting the whole portfolio on this stock – but there is certainly an interesting investment case here.”