Two Perth-based cannabis companies are set to make their debut on the ASX in the coming days, hoping to revitalise an industry that has seen better days.
Perth-headquartered Emerald Clinics is listing on Wednesday after a $8 million capital raising, while shares in West Perth-based grower Little Green Pharma are set to begin trading early next week week after a $10 million initial public offering.
The listings come at a difficult time in the industry, which is struggling with a glut of supply globally as legalisation has progressed more slowly than some cannabis backers optimistically predicted.
Shares in ASX-listed companies like Auscann Group, Cann Group and Creso Pharma are all a fraction of what they were three years ago.
“We did anticipate this coming some time ago – it’s not surprising,” Emerald Clinics chief executive and managing director Dr Michael Winlow said of industry’s difficulties.
Dr Winlow told AAP that companies have been putting too much effort into growing pot and not enough into proving the drug is a safe and effective medicine.
“It’s the kind of evidence the industry absolutely needs if it’s going to establish itself as a credible therapeutic option,” he said.
“What these companies have failed to do is penetrate mainstream medicine.”
Emerald has four clinics – in Sydney, Melbourne, Perth and the Northern Rivers region of NSW – in which patients can be prescribed medical marijuana under the federal government’s Special Access Scheme.
Over 1,000 patients have been treated since Emerald’s first clinic opened in December 2018, mostly for chronic non-cancer pain but also dozens of other conditions including side effects from chemotherapy, cancer pain and Alzheimer’s.
The goal is to treat patients while gathering anonymous, real-world data from patients that could be presented to regulators.
Emerald has closed patient-data deals with customers including Spectrum Therapeutics, the medical division of the world’s largest cannabis company, Canopy Growth.
In the year ending June 30, it had revenue of $109,909 and expenses of $2.68 million, and expects to use the funds from the listing to expand into the United Kingdom.
Little Green Pharma meanwhile describes itself as a vertically integrated medicinal cannabis business that was the first to offer Australians locally grown medicinal marijuana products, in August 2018.
More than 4,500 bottles of its three different oil-based oral medicinal marijuana have been dispensed to more than 1,400 patients across Australia, and Little Green Pharma recently received its first commercial orders for 2,400 units from Germany.
In fiscal 2019 it had a loss of $5.5 million on $248,500 of revenue, but says its first-mover advantage and nearly two years of successful cannabis cultivation give it an advantage over competitors.
Little Green Pharma has an indoor growing facility in Western Australia that it is expanding so it can cultivate more than 110,000 bottles of medicinal cannabis oil per year.
As of January 31, over 31,000 Australians have been approved to use medicinal cannabis products under a special access scheme the government set up in 2016.