Canberra-based company morphs into a marijuana and industrial hemp company

By JOHN MCCARTHY
Source: couriermail.com.au


An Australian miner is morphing into a marijuana and industrial hemp firm and is aiming to be the first listed company of its type.

A STAGNANT Australian mining company, known as a zombie, is morphing into a marijuana and industrial hemp company and intends to be the first listed company of its type.

The Canberra based Capital Mining has barely traded with its shares valued at less than a cent, hence the zombie category, but it is now aiming at snapping up future global licences in countries where legislation surrounding marijuana changes.

Capital listed on the ASX March 2007 and was engaged in the exploration for deposits of gold, base metals, platinum, nickel, uranium and other rare metals in south eastern Australia.

It follows the listing of Phytotech in January, a medical marijuana company which is also aiming at the US market.

Capital will buying three separate companies in the North American markets and to do this will attempt to raise $15 million.

Analysts BBY said once all transactions are completed, CMY would be a well-positioned, vertically integrated medical marijuana company with diversification into the fast growing market for industrial hemp.

“We initiate coverage on CMY with a speculative buy rating given that we view the fast-changing global legislation around medical marijuana as a clear positive for CMY even though there will be integration risks and growing pains in the company’s new constellation,’’ BBY said.

Cannabis is now regulated in 23 American states and is sold for medical purposes in Canada.

Australian states are starting to view medical cannabis differently and trials are underway in NSW. Queensland is watching with interest.

Even Queensland conservative politicians like Dawson MP George Christensen have backed legalising marijuana and see not only medical uses but as another crop for the Queensland agriculture industry.

It is used as a treatment for a number of medical issues including cancer and epilepsy.

One of the companies to come under Capital’s wing will be Nutrawerx which has an exclusive agreement for development of branded hemp products including hemp-based food, cosmetics and nutritional supplement

Nutrawerx believes it can grab market share of US$580m hemp retail market within three years.

It is also developing mainstream, pharmaceutical-grade supplements for the global market as well as promoting the therapeutic potential of cannabinoids, with a focus on cannabidiol.

Capital said the US retail market for hemp-based food and health and beauty-aid products is estimated to have been in excess of $US600 million in 2014 and growing at a rate of about 25 per cent a year.