Cannasouth first half loss widens, stock drops 37%

Speculative buying has driven Cannasouth's shares up sharply in recent weeks. Photo / NZ Herald

Medicinal Cannabis company Cannasouth's operating loss widened in the six months to June 30 but the company said its result was in line with its business plan.

Waikato-based Cannasouth said its loss came to $1.45m, up from $821,175 in the previous corresponding period.

Cash on hand was $10.18m, down from $10.77m a year earlier.

The New Zealand Medicinal Cannabis Scheme came into effect on April 1, providing guidance as to how the medicinal cannabis industry would be required to operate.

Cannasouth said it will require various licences under the scheme to cover aspects of its vertical integration business strategy - from cannabis cultivation, to the sale of finished medicinal cannabis products.

The company had been working through the new licencing programme and has begun submitting licence applications to cover its commercial activities.

In the meantime, Cannasouth remained focused on a vertically integrated commercial strategy "and continues its commitment to producing medicinal cannabis products in New Zealand from locally produced raw materials".

In May, Cannasouth said had entered into a supply agreement with MediPharm Labs Australia Pty Ltd for the supply of "white label" medicinal cannabis products.

Cannasouth' said its s cultivation joint venture had been put on hold the construction of its state-of-the-art hybrid greenhouse cultivation facility during the Covid-19 lockdown.

Speculative interest in Cannasouth has driven the stock up sharply in recent weeks.

Cannsouth's shares, which debuted on the NZX in June last year, closed today at 76c, down 45c or 37.1 per cent from its peak.

Trading in all stocks has been disrupted by cyber attacks on exchange for the fourth day in a row.