Medical cannabis producer, Cann Group Limited (ASX: CAN) have announced this morning their response to yesterday’s price query from the ASX that lead to the company being placed in a trading halt soon after. The regulator probed the company to ‘please explain’ yesterday’s trading activity which saw almost a 19% increase in trading price and an increase in the volume of securities that had been traded, unaccompanied by any announcement.
In response to the questions asked by the ASX, the company said they were not aware of any information not yet released to the market that could explain the drastic changes in their securities. Instead, Cann suggested that recent posts made on LinkedIn by IDT Australia Limited (ASX: IDT) may have caused the queried trading activity. However, the posts by IDT do not mention nor indicate any involvement with Cann Group. The Melbourne-based companies entered into a medical cannabis product manufacturing agreement in August 2018.
Cann Group also said “the Company [Cann Group] and IDT have today jointly announced a manufacturing update so that the market is fully informed of the current status of that manufacturing activity”. The company denied in their response that they were in breach of Listing Rule 3.1 which requires an entity to disclose information to the ASX where a reasonable person would believe such information could affect the entity’s securities. Cann responded that they are complying “in particular” to the rule.
Following their response to the query, the company released the announcement that extraction activities for medical cannabis resin with IDT have begun. Peter Crock, Cann’s CEO, commented on the manufacturing news “This facilitates the manufacture of finished product formulations and puts us a step closer to launching our own locally sourced and produced range of medicinal cannabis treatments to satisfy both domestic demand and to help develop valuable export pathways.”
Cann Group stock traded as high as $1.235 this morning, a further 18% increase from yesterday’s intra-day high of $1.030. However, the stock was trading at $0.625 on 2 Jan, prior to the LinkedIn issue.
Bronte Moore is a business journalist at Emerald Financial whilst also completing a JD at the University of Melbourne.
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