Monday 30th August 2021
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The operating loss for the six months to 30 June 2021 was $1,992,634 (2020: $1,451,650). The result was in line with the Group’s business plan and represents the ramping up of our investment in developing Cannasouth to be New Zealand’s leading medicinal cannabis company.
Cash on hand as at 30 June 2021 was $4.63 million (2020: $11.18 million, which included a successful capital raise in May 2020 of $6 million).
Cannasouth’s strategy of a vertically integrated group is well articulated. We are committed to producing medicinal cannabis products in New Zealand from locally sourced raw materials. Cannasouth also has a supply agreement with an Australian supplier to import three medicinal cannabis products.
Registration applications for these products were submitted to the Agency in November 2020. This agreement is an important step for Cannasouth to meet an initial business objective to make available pharmaceutical grade medicinal cannabis products to New Zealand patients as soon as possible, prior to producing its own manufactured products.
New Zealand regulations require companies to operate to the highest pharmaceutical quality standards. To participate in the medicinal cannabis industry requires not only purpose-built facilities, but also professionals with expertise in key areas. Quality is one of those key areas.
Cannasouth is at the inflection point of transitioning from a capital-intensive start-up phase to generating its first revenue stream. Subject to completing off-take agreements with overseas buyers, revenue from the export of high-quality medicinal cannabis flower biomass is expected to be circa $8 million on an annual basis. The Company is in negotiations with several prospective customers for off-takes of the first harvest and exports are expected to begin in early 2022.
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