This Australian company went from mining bauxite in Queensland to growing medical marijuana – and others might follow suit

• Cann Global Limited has had a volatile first week on the Australian Securities Exchange after listing on Friday 23 August.
  

• The company formerly traded under the name Queensland Bauxite, and has since transformed into a medicinal marijuana and hemp foods company.
  

• While the transformation has been "complex" for both the company and its investors, Cann Global's executive chair Pnina Feldman told Business Insider Australia she is determined to get a slice of the burgeoning cannabis market.

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The Australian Securities Exchange has rarely seen a transformation as complete as Cann Global's — the mining turned medical marijuana and hemp company that re-listed in August.

Having first debuted on the exchange in 2008, Queensland Bauxite, as it was then known, was on the surface just another textbook case study of Australian mining boom conservatism, in the business of exploring and exporting precious minerals to feed China's insatiable appetite for steel.

And though its flagship project was located just outside Innisfail in far north Queensland, the company's headquarters lay 2,000 kilometres away in ritzy Bellevue Hill overlooking Sydney's eastern suburbs.

At the helm sits Pnina Feldman, the first Australian woman to list a mining company, recipient of a community service award from Malcolm Turnbull, daughter of Chaim Gutnick, one of Australia's most prominent rabbis, and cousin of Diamond Joe Gutnick, the former multi-millionaire mining magnate.

And yet, despite its establishment credentials, the mining company's board had its eyes on a much more progressive and future-focused market: cannabis.

Having long been connected with top medicinal cannabis researchers in Israel, Queensland Bauxite saw the legalisation of the product in Australia in 2016 as its moment to pounce on a major transformation.

Queensland Bauxite enters the weed business

In March 2017, the company acquired 55% of Medical Cannabis Limited, a company founded by marijuana industry pioneer Andrew Kavasilas, who was one of the first Australians to legally grow cannabis under a New South Wales trial in 2000.

In June 2018, it doubled down on its cannabis ventures, acquiring the remaining stake in MCL and entering into a licensing arrangement with Medcan Australia, which holds a medicinal cannabis licence from the Office of Drug Control.

Fast forward to today and the renamed Cann Global Limited is now one of the ASX's pot stocks to watch, while Kavasilas serves as the chief technical officer for its cannabis business.

Feldman told Business Insider Australia that the transformation, and especially the process of de-listing and re-listing which required a number of different prospectuses to be lodged to the ASX, was "complex ... and took longer than expected".

But she seems undeterred from the ultimate prize.

"We know there is an increasing demand [for cannabis and hemp products] in the Australian and global markets, so our primary focus is to legally grow and cultivate hemp to research and develop medicinal cannabis products to service this demand," Feldman told Business Insider Australia.

Investors get 'acclimatised'

Market analyst Hina Chowdhary of Kalkine told Business Insider Australia that Cann Global -- not to be confused with fellow Aussie marijuana company Cann Group -- has "come a long way given its transformation strategy".

Having re-listed on Friday 23 August at $0.030 per share, by Monday the 26th the stock price had fallen 10% before rising to $0.035 on the following Friday 30 August on the news that it had entered into a supply arrangement with the US retail giant, Costco.

Costco's 11 Australian stores made an order of 6,900 bottles of Cann Global's VitaHemp hemp seed oil capsules.

"Our hemp seed oil capsules ... are a natural and plant-based alternative to fish oil capsules without the fishy after taste," Feldman said in a statement on the Costco deal. "We hope to see this and all our ... products and brands on many Australian tables in the years to come and distributed across Asia."

Were that to happen, Aussie investors would likely reward the transformed company, but right now they remain cautious, Chowdhary said.

"The group has been still under the inertia with investors yet to get acclimatised to the proposed changes to the business given the complexity in the structure as illustrated across medical cannabis, hemp seeds food, and mining divisions," she said.

While it might be hard for some investors to get their heads around, these kinds of transformations are unlikely to be a one-off, as the Australian economy tries to wean itself off its reliance on mining and fossil fuels.

With the Asia-Pacific cannabis market tipped to be worth US$5.8 billion by 2024, miners might want to take a leaf out of Cann Global's book.

UPDATED 3/9/19 12:28PM: A previous version of this article indicated Cann Global acquired 100% of Medcan. A Cann Global spokesperson clarified that while the company announced its intention to acquire Medcan in June 2018, it ultimately did not go ahead with the plan. The article has been amended.