Australian medicinal cannabis company Cronos Australia (ASX: CAU) has started trading on the Australian Securities Exchange, following a successful AUD$20 million initial public offering (IPO) of shares.

Cronos Australia raised AUD$20 million from institutional and sophisticated investors in October, offering 40 million shares at AUD$0.50 each. The Company’s indicative market capitalisation at the close of the offer was approximately AUD$64.4 million.

Cronos Australia trades under the ASX ticker code of CAU.

“The ASX listing is a significant milestone in the life of Cronos Australia, and we look forward to delivering on our vision of being a leading health and wellness company in the Asia-Pacific Region through a portfolio of successful, premium cannabinoid brands and products,” Shane Tanner, Chairman of Cronos Australia noted.

Cronos Australia is pursuing an asset-light business model under which the cultivation of medicinal cannabis and the manufacturing of medicinal cannabis products is expected to be outsourced to other companies both domestically and overseas.

Cronos Australia intends to import and sell Cronos Group’s PEACE NATURALS™ medicinal cannabis products, which are sold in Canada and Germany.

Cronos Australia Chief Executive Officer, Rodney Cocks, said, “Cronos Australia is excited to join this fast-emerging sector as Australia’s newest listed medical cannabis company. Our asset-light business model, backing of Cronos Group and Asia-Pacific focus give the Company a unique proposition in our market.

“We look forward to providing future updates to the market as the funds raised are deployed to accelerate the development and commercialisation of our portfolio of medicinal cannabis products.”

Cronos Australia was established as a 50:50 joint venture between Cronos Group and NewSouthern Capital. After the issue of new shares, Cronos Group holds approximately 31 per cent of the issued capital of Cronos Australia.

Subject to the terms of an IP license agreement between Cronos Group and Cronos Australia, Cronos Australia has access to certain elements of Cronos Group’s intellectual property.

The Australian market for medicinal cannabis is still in its early stages, reflecting complex legislation and regulation. However, patient access is expected to continue growing as legislation evolves and markets open.

The IPO offer was fully underwritten by Lead Manager Bell Potter Securities Limited.

SOURCE Cronos Australia