Melbourne-based medicinal cannabis supplier Althea Group has raised $20 million in an initial public offering ahead of its listing on the ASX on Friday.
Medical cannabis company Althea Group has raised $20 million in an initial public offering to fund its own cannabis production facility.
The Melbourne-based business met its $19.6 million target, at 20 cents per share, to give it a market value of $40.6 million ahead of its listing on the ASX on Friday.
Althea will use the funds to build a facility on 10 acres in Skye, Victoria, to grow and produce about three tonnes of high-grade, dried medicinal cannabis flowers per year. It also plans to increase its sales of imported products.
The company was founded in 2016 by managing director Joshua Fegan, coinciding with the amendment to the Narcotic Drugs Act legalising the sale of medical cannabis to approved patients.
Mr Fegan was first introduced to the idea by a family member, who had invested in a medicinal cannabis company in Seattle.
"I said, 'No way, this is not legal',"he said.
But like all trends that come out of the US, it eventually trickled its way down to Australia.
Althea is licensed to import, cultivate, produce and supply medicinal cannabis. It began selling five products - four oil based and one dried - in May.
Its supplier is Canadian cannabis giant Aphria, which will own a 25 per cent stake in Althea once the initial share offering is complete. The two companies entered into a three-year product, plant and genetics acquisition agreement, including the design of Althea's planned Skye facility.
"They've basically given us the blueprint," Mr Fegan told AAP on Thursday.
In return, the company gets access to the growing Australian market and help to navigate what Mr Fegan says are the nation's "arduous and cumbersome" controls.
"I believe that the TGA is for good reason the strictest globally," he said.
Growing the market for medicinal cannabis depends on doctors and pharmacists, as well as patients themselves, understanding how to prescribe and use the drug, Mr Fegan explained.
Althea has developed a digital support platform, Althea Concierge, a mobile app and web-based education service for healthcare professionals and patients wishing to learn about, and access, medicinal cannabis.
Medicinal cannabis is currently being used to treat a variety of illnesses, from epilepsy and non-cancer pain to insomnia, anxiety and post-traumatic stress disorder.