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Secrecy, security key in pot stock growth

April 30, 2017

Medicinal cannabis grower Cann Group's production facility is surrounded by barbed wire.

Medicinal cannabis grower Cann Group's production facility is surrounded by barbed wire and is watched over by security cameras.

The location of the facility - other than that it is somewhere in Melbourne - and how much cannabis is being grown are closely guarded secrets.

Every plant has a bar code and an ID, and visitors wear lab coats with the pockets sewn up to deter theft.

While entry to the physical premises is heavily discouraged, investors in the "pot stock" sector are piling into new listings and Cann Group is no exception.

Cann Group will join an expanding market subsector when it starts trading on the Australian share market, on May 3.

Group chairman Allan McCallum, who is also chairman of salmon producer Tassal, says secrecy is needed because cannabis is classified as a "divertible drug".

"It means you could jump the fence if I were to grow (cannabis) on my farm, get a plant, and you would have something that you could sell right away," Mr McCallum said

"That's why the federal government's Office of Drug Control has this issue around naming sites, naming production, naming areas and naming capacity."

The restrictions on disclosure hasn't deterred investors or interest in the sector.

Chief executive Peter Crock said that the company's website has been inundated with requests for access to product and also expressions of interest in working for the company.

"It included one that went: 'I'm really good at growing this stuff. How do you get involved in the legal side of this industry?'" he said.

Cann Group says it received overwhelming demand for shares in its initial public offer, which raised $13.5 million through the issue of 45 million new shares at 30 cents per share.

Canada's second largest medicinal cannabis company, Aurora, has bought a stake of 19.9 per cent.

Cann Group has licences from the Office of Drug Control to cultivate medicinal cannabis for patient use and to conduct research on the use of cannabis for medicinal purposes.

Mr McCallum said the cannabis crop is strictly monitored and audited, with the company required to keep extensive records, and the Office of Drug Control able to check the crop at will.

Cultivators must also show that they are fit and proper persons to grow cannabis.

Funds raised from the share offer will be used to expand into a second production facility in Melbourne for both cultivation and research activities.

Cann Group plans to harvest its first plants for commercial use in Australia before the end of the year.

Various strains of cannabis will be grown, containing different combinations of THC (tetrahydrocannabinol), CBD (cannabinol) and other cannabinoids, to treat specific medical conditions such as chronic pain and epilepsy.

https://thewest.com.au/business/agriculture/secrecy-security-key-in-pot-stock-growth-ng-s-1717278

 

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