Australian firm Queensland Bauxite Limited (ASX:QBL) is to create a joint venture with Israeli medicinal cannabis producer Pharmocann to supply global markets.
Israel has a thriving medical cannabis industry, but the country has a ban on exporting marijuana. To sidestep this, Queensland Bauxite has announced plans to create a 50/50 joint venture under which its subsidiary, Medcan, will manufacture Pharmocann’s proprietary medical cannabis products in Australia for distribution throughout Australia and globally.
The two firms have signed a memorandum of understanding and they will collaborate on clinical trials in both Israel and Australia. Pharmocann, which has spent the past decade supplying thousands of Israeli patients with medicinal cannabis flower, oils and ointments, will provide intellectual property, recipes and manufacturing techniques, including existing Israeli clinical trial data. Medcan, which Queensland Bauxite snapped up earlier this year along with Medical Cannabis Limited, will handle the manufacturing at an Australian facility, produce the raw cannabis and acquire the necessary licenses.
“Pharmocann are one of the top Israeli medicinal cannabis companies and have developed a unique range of products which are showing extraordinary results in clinical trials,” said Medcan chief executive Craig Cochran. “Their expertise in the medicinal cannabis field is well recognised globally, and we are excited to have access to a skillset and product range of this calibre.”
The costs of the joint venture have not yet been detailed, but an IPO could be on the cards as both firms seek to grow their international footprints. Pharmocann is conducting a number of clinical trials in Israel as it bids to become a leader in the sector, while developing and growing medicinal cannabis in GAP standard greenhouses.
Queensland Bauxite is primarily a mining company, with major projects in Queensland and New South Wales, but it sees great potential in medical marijuana and it is now a major player in Australia after the double acquisition it completed in June. Chairperson Pnina Feldman told shareholders that there is a huge international market developing and that the joint venture will help it capture a slice of a lucrative industry. In July it was awarded import and export licences from Australia’s Office of Drug Control and it has been importing medicinal marijuana from Canada to supply pharmacies across Australia.
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