Australian Cannabis Index | DEA Grants Research Growing Approvals

At the same time, it was also announced that the Minnesota state government had successfully passed a proposal to legalize recreational marijuana use.

Last week the US government announced it would begin granting growing approvals to several companies for medicinal marijuana research, ending an informal moratorium on license issuing which has been in place since the Trump administration.

According to a press release from the founder and CEO of Biopharmaceutical Research, George Hodgin, the marijuana manufacturing approvals represent a "monumental step" forward for the American cannabis industry.

This federal license will forever change the trajectory of our business and the medicinal cannabis industry. The DEA's leadership will set off a nationwide wave of innovative cannabis-derived treatments, unlock valuable intellectual property and create high quality American jobs.Biopharmaceutical Research Founder and CEO, George Hodgin

At the same time, it was also announced that the Minnesota state government had successfully passed a proposal to legalize recreational marijuana use.

However, while the legislation's passage through the House was largely expected, it faces a tougher time in the Republican-controlled Senate, which has historically demonstrated extreme reluctance to entertain the issue.

"Over the course of 12 public hearings this year and a statewide tour visiting 15 communities, Minnesotans were loud and clear that our state's medical cannabis program was too expensive, and that allowing flower could significantly improve access," Democratic House Majority Leader Ryan Winkler said.

"As a result of Minnesotans who made their voices heard over the course of years—whether you are a veteran suffering from PTSD, a person with a serious health condition, or a parent with a sick child—more people will gain the ability to live healthy, fulfilled lives."

"Without Minnesotans' activism and personal stories, and without a historic vote in the Minnesota House to legalize cannabis for adult use, this accomplishment would not have been possible."

As a result, the outlook of the 'Horizons Marijuana Life Sciences Index ETF' (HMMJ) experienced a noticeable spike on the six-month performance chart on Friday—after flagging for much of the week—showing a gain of 24.4%.

Conversely, the performance of the Australian Cannabis Index spent the week in a state of ongoing decline before reaching a nadir of -11.9% by the week's end, while the S&P 500 and Australia's All Ordinaries both experienced minor dips followed by moderate rally.

Keeping this in mind, let's examine some of the ASX-listed shares that drove the market forward last week.

Creso Pharma

Creso Pharma (ASX:CPH) announced that Halucenex Life Sciences—which is currently a target acquisition for the company—managed to successfully secure an additional 10 grams of synthetic psilocybin from its Canadian manufacturing partner for use in R&D initiatives and future clinical trials.

The additional 10 grams will add to company's existing inventory, making it one of the largest holders of single batch GMP grade synthetic psilocybin in Canada.

There is strong competition and a bottleneck in the current psilocybin supply chain, so to nearly double our inventory is a significant value accretive event, which significantly de-risks clinical trial timelines. Securing additional inventory also highlights the strength of our relationship with Canada's only synthetic psilocybin manufacturer. We have a number of research and development initiatives planned over the coming months including new delivery integrations for faster onset and potentially enhanced efficacy, as well and the integration of our compounds in collaboration with clinical partners and we look forward to updating shareholders progressively.Halucenex Founder and CEO, Bill Fleming

This was big news for Creso Pharma, as the additional supply of synthetic psilocybin will allow the company greater manoeuvrability in its clinical trial and R&D initiatives—which are presently scheduled to commence in a subsequent quarter—subject to licencing and regulatory approval from Health Canada.

As a result, Halucenex now has the capacity to increase the total number of trial participants in its upcoming phase II clinical trial, which will ensure that all participants in future phases are treated with a consistent GMP batch for tracking and traceability purposes.

"Halucenex is now one of the largest holders of single batch GMP grade synthetic psilocybin in Canada. This is a major development and opens a number of doors for Halucenex in medium and long term," Creso Pharma non-executive Chairman Adam Blumenthal said.

"Once it secures its licence from Health Canada, Halucenex will have the capacity to progress a number of R&D initiatives, which have the potential to unlock new drug delivery methods and combinations, potentially leading to a higher level of care through alternative treatment methods. We look forward to working with Halucenex and its existing partners to progress these research initiatives."

"Halucenex and the Creso group more broadly continues to make steps forward. We have achieved a number of regulatory hurdles in regards to the proposed US OTC listing and anticipate DTC eligibility shortly. This will unlock considerable benefit for shareholders. We are very excited to share some of the developments the Company has been working on in the coming months."

Disclaimer: Past performance is not an indicator of future performance.

Incannex Healthcare

The Australian pharmaceutical developer, Incannex Healthcare (ASX:IHL), announced last week that it had partnered with the University of Western Australia Centre for Sleep Science (UWA) to expand its ongoing investigative IHL-42X clinical trial to a multi-site study.

While the Obstructive Sleep Apnoea trial is currently being conducted at the Alfred Hospital in Melbourne, additional patient recruitment will now also be handled by the medical and scientific staff at UWA.

We have been impressed with the academic credentials of the team at UWA CSS and their enthusiasm for the potential of IHL-42X as a treatment for OSA. UWA CSS are also the only academic institution in Australia that has experience in conducting research on cannabinoids and sleep disorders. Our partnership with UWA, also puts us in good stead for the next steps in the IHL-42X development program because pivotal studies necessary for FDA registration will require multi-site patient examinations.Incannex Healthcare Managing Director and CEO, Joel Latham

The move leaves the company well-positioned to pursue the next steps in its clinical development program, as an eventual application for FDA product registration will require multi-site patient examinations.

In its last quarterly update Incannex indicated that its current cash holdings amounted to approximately $10.4 million, as of March 2021 quarter. The company's net cash outflows were recorded as $1.98 million—which primarily constituted R&D spending—and will be covered in part by the Australian Government R&D rebate scheme.

According to an official statement from Incannex Healthcare, during this period the company managed to achieve cash inflows of $638,000, which were "associated with the sale of unregistered cannabinoid oils during the quarter with revenue largely remaining steady and consistent with the previous two quarters."

"However, as previously disclosed in the Company's AGM presentation, the board of directors has noticed substantial and increasing margin compression in a space that is becoming overcrowded. This has resulted in significant product discounting throughout the sector. In addition, the Company's initial advice from its US advisors is that US investor interest is likely focused on IHL's drug development activities and its psychedelic program."

"These are proprietary programs over which IHL has patent protection or intends to have patent protection over aspects of the drug and or therapy. This is particularly relevant following FDA pre-IND guidance relating to IHL-675A having the potential to be a multipurpose drug," the statement said.

Disclaimer: Past performance is not an indicator of future performance.

Medlab Clinical

Last week Medlab Clinical Limited (ASX:MDC) announced the appointment of Mr Kerem Kaya as its new Chief Financial Officer (CFO). Prior to working with Medlab Kaya gained extensive pharmaceutical industry and financial experience working with one of the world's largest pharmaceutical companies, Novartis, over a fifteen-year period.

During that time, he worked across several divisions—mostly notably spending five years as Global Finance Projects Manager of Novartis AG—before becoming the Head of Finance Planning and Analysis for the company's Australian and New Zealand operations.

I am delighted to welcome Mr Kaya as Chief Financial Officer of Medlab. He brings an exceptional combination of leadership combined with financial, strategic, and global experience in the pharmaceutical sector. We continue to build out a high calibre team, with global pharmaceutical industry experience, creating an organisational structure that will support our clinical and commercial expansion into the US and UK. I'd like to thank Mr Simon Allsop for his role as interim CFO while we undertook the recruitment process for Chief Financial OfficerMedlab Clinical CEO and Managing Director, Dr Sean Hall

During the same week, the company also confirmed that its CEO, Dr Sean Hall, had been invited to present at the prestigious Jefferies Global Healthcare Conference 2021.

The event is one of the largest healthcare investment conferences in the world and has a significant impact on the US financial community.

The conference will feature over 400 healthcare companies, along with 3,000 leading executives, institutional investors, private equity investors and venture capitalists.

Dr Hall's presentation will focus on the development of its NanaBis program, as well as its potential as a viable solution to opioid addiction, which is highly relevant to the US medical community due to its worsening opioid crisis.

The presentation is expected to significantly boost the profile of Medlab's pipeline of cannabinoid therapies, particularly its patented lead drug candidate, NanaBis, which was developed for cancer bone pain as a viable alternative to harsher opioid-based drugs.

Disclaimer: Past performance is not an indicator of future performance.

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Hugo Gray
Hugo Gray

Hugo Gray is a Melbourne-based journalist with a body of work that covers a diverse range of topics, including immigration law, sex technology, and now the rapidly expanding cannabis industry.