As part of the initial deal, Melbourne-based Cannvalate will obtain the right to sell the Rho Phyto line of products from Avicanna in Australia as the exclusive distributor.
The Canadian firm will also provide white-label products to Cannvalate alongside its branded items. The Rho Phyto products for the Australian market will be manufactured in Colombia through Avicanna’s subsidiary operations in the nation.
Aras Azadian, CEO of Avicanna, told investors that the Canadian firm underwent significant due diligence before stepping into the emerging Australian market. The executive said this agreement was designed for its medical cannabis product offerings.
The current line of Rho Phyto offerings from Avicanna includes a sublingual spray, oil drops, soft gel capsules and a topical cream and gel.
Sud Agarwal, CEO of Cannvalate, added that the firm will help Avicanna satisfy testing standards from Australia’s Office of Drug Control (ODC). “We have been particularly impressed by their attention to quality processes and firm stance on providing validated clinical research,” Agarwal said.
Cannvalate is a business-to-business services company for the medical marijuana industry.
Avicanna joins a running list of Canadian names pursuing active operations in Australia through partnerships or a direct presence. One of the most recent participants in the space, MPX International (CSE:MPXI,OTC Pink:MPXOF) announced in early February that it had obtained a medicinal cannabis licence from the ODC.
Shares of Avicanna opened at C$1.87 on Monday (February 24) in the Canadian markets. However, the company quickly dropped in value during the early portion of the trading session.
In a note to investors issued in January, Cameron Bell, an analyst with boutique bank Canaccord Genuity Australia, reassured readers that the market in the country was looking better after a sluggish 2019. The bank’s own index for Australian names had seen significant recent growth at the time thanks to easing concerns from offshore investors.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.