Australian medicinal cannabis firm AusCann has entered a partnership with the world's biggest legal cannabis producer, Canada's Canopy Growth Corporation.
As Australia's nascent medicinal cannabis sector starts to develop, AusCann says its deal with Canopy puts it in pole position for international expansion opportunities.
So-called "pot stocks" have been encouraged by the Australian government's decision in February to allow cannabis cultivation for medical or scientific purposes.
AusCann said the deal will give it access to Canopy's expertise in cultivation, manufacture and supply of quality medicinal cannabis ahead of a planned ASX listing in July.
AusCann expects to start trading on the Australian share market via a reverse takeover of listed wine investor TW Holdings.
Shares in TW Holdings, which will alter the nature of its business and change its name to AusCann, jumped 0.1 cent, or 10 per cent, to 1.1 cents on Monday.
AusCann chief executive Elaine Darby said the deal with Canopy would help AusCann develop the medical community's trust in medicinal cannabis and enhance AusCann's ability to produce dependable, clinically validated medicines.
"This partnership is a massive step toward achieving that aim," Ms Darby said on Monday.
Canopy was the first publicly-traded, federally-regulated cannabis producer in North America.
Under the deal, Canopy, which is listed on the Toronto Stock Exchange with a market capitalisation of more than $250 million, will take a 15 per cent stake in AusCann and has an option to acquire a further five per cent.
In return, Canopy will offer its expertise in production, quality assurance and operations, plus strategic advice.
Canopy has the capacity to grow 46,400 square metres of medicinal marijuana sold under the Tweed and Bedrocan Canada brands.
AusCann consultant Dr Stewart Washer, who is also the chairman of biotechs Orthocell and Cynata Therapeutics, said AusCann was now internationally linked through the deal with Canopy.
"They (Canopy) are already talking about other opportunities beyond Australia, so AusCann is in a pole position," Dr Washer said.
Dr Washer said there was growing acceptance of medicinal cannabis among doctors, the public and politicians.
"Cannabis worldwide is suddenly becoming the cool thing to get elected on," he said.
Amendments were made to Australia's Narcotics Drugs Act in February to allow patients and doctors access to a safe, legal and reliable supply of medicinal cannabis products for the management of painful and chronic conditions.
Other medicinal cannabis-related firms listed on the Australian share market include MGC Pharmaceuticals, MMJ Phytotech and Medlab Clinical.
Medicinal cannabis is not designed to make users "high".
Chemical compounds in the marijuana, called cannabinoids, are manipulated to produce variants of the marijuana that can be used to treat specific conditions such as epilepsy, nausea, inflammation an glaucoma.
Medicinal marijuana can also be used for pain management and as an appetite stimulant.
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