Interest is already high on cannabis

INVESTORS have gone potty for Althea Group with shares in the medicinal cannabis supplier trebling in value on their ASX debut.

The Melbourne- based business opened at 60 cents after the company raised $ 19.6 million, at 20 cents a share, in its initial public offering.

Canadian cannabis giant Aphria owns a 25 per cent stake of the company, while founder Joshua Fegan holds 29 per cent, worth about $ 34.4 million at market close.

Althea will use funds to build a cannabis- growing plant on 4ha in Skye, Victoria.

It plans to grow and produce about three tonnes of high- grade dried medicinal cannabis flowers each year.

It also wants to increase its sales of imported products.

Mr Fegan started Althea in 2016 when the Federal Government legalised the sale of medical cannabis to approved patients.

His interest had been sparked by a family member who had invested in a medicinal cannabis company in Seattle.

“I said, ‘ No way, this is not legal’,” he said.

“But like many trends from the US, it eventually trickled its way down to Australia.”

Althea began selling five products — four oil- based tinctures and one dried — in May. Its supply is currently grown by Aphria.

The two companies have a three- year product, plant and genetics acquisition agreement, including the design of Althea’s planned Skye facility.

“They’ve basically given us the blueprint,” Mr Fegan said.

In return, the company gets access to the growing Australian market and help to navigate what Mr Fegan said were the nation’s “arduous and cumbersome” controls.