Cann Group Limited (ASX: CAN)Share Price and News
About Cann Group
Cann Group is Australia’s largest licensed medicinal cannabis producer, focused on cultivating, manufacturing, and distributing medicinal cannabis products. Cann Group specialises in producing high-quality cannabis flower, extracts, and oils that comply with the Australian Therapeutic Goods Administration (TGA) requirements.
The company has a glasshouse in Mildura, Victoria that it claims is the most technologically advanced indoor, full GMP medicinal cannabis cultivation & manufacturing facility in the southern hemisphere. Cann aims to produce 5.5t for FY25. This will be not just produce for itself, but also contract growing and packing for other companies.
Cann Group Company History
Founded in 2014, Cann Group was among the first companies in Australia to obtain a licence for the commercial cultivation of medicinal cannabis. The company initially focused on research collaborations with universities and pharmaceutical partners to develop safe and effective cannabis products.
Over the years, Cann Group has achieved several critical milestones, including receiving its first commercial cultivation licence in 2017 and subsequently expanding its greenhouse facilities to increase annual production capacity. In 2017, the company went public on the ASX, raising capital to fund further production scale-up and market expansion.
2022 was the year of the first harvest, but it has been a difficult time for the company as it had previously under-appreciated inefficiencies, differences between growing conditions in various seasons. In FY24, it made $15.7m revenue but a loss of $51.2m, a figure magnified by a depreciations and non-cash finance charges.
Future Outlook of Cann Group (ASX: CAN)
Cann Group’s future outlook is underpinned by several key financial and strategic factors.
Medicinal cannabis appears to have a bright future with increasing domestic patient numbers as awareness and acceptance of medicinal cannabis rising. It is estimate 2-2.4m Australians use over 650t of cannabis both legally and illegally and the legal market is over 100t per year. The current market value is $500-700m at a patient level, growing around 25% year on year. But investors just haven't embraced this sector for a number of years because many companies in that space never got anywhere, only rising due to regulatory changes.
Cann Group has had a difficult first few years of production and still has a lot of work to do in order to win the trust of investors again. It has taken some steps including new technology and efficiency initiatives there (including a new multi head filler and a hang drying technique).
Is CAN a Good Stock to Buy?
From an investment perspective, Cann Group presents a mix of growth potential and risk typical of emerging sector stocks. Cann is one of the few cannabis stocks to have gone somewhere, in the sense that it has a producing facility.
But risks remains elevated due to the evolving regulatory environment, competitive pressures from both domestic entrants and global cannabis giants and operational challenges at its Mildura facility.
Our Stock Analysis
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Frequently Asked Questions
Cann Group does not currently pay dividends as it focuses on reinvesting earnings into growth, production capacity, and R&D. Investors should view CAN as a growth stock rather than an income play.