Increasing numbers of doctors are showing a willingness to embrace medicinal cannabis, Cronos Australia has said, as it plots further growth of its CanView platform and targets revenue of A$100 million in FY23.

With only a little over 2% of Australian doctors on CanView – compared to 50% of pharmacies – Cronos will focus on bringing more GPs onto the platform over the next 12 months.

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Cronos Australia’s medical science liaison team will focus on bringing more doctors onto the CanView platform

Writing exclusively for Cannabiz, chief executive and executive director Rodney Cocks said “the runway for the entire industry will be built” as more doctors come onboard.

Cronos’s growth aspirations follow a strong FY22 which saw revenue climb 208% to $67m and profits rise 327% to $6m. The performance, driven by its merger with CDA Health last December, prompted Cronos to pay a dividend to shareholders, becoming the first ASX-listed medicinal cannabis firm to do so.

The prospects of bringing more doctors onto the CanView platform during Fy23 are encouraging, Cocks told Cannabiz, as he claimed the product was “mainstreaming”.

“There are more than 700 prescribers, representing about 2.2% of all the GPs nationally, currently onboarded onto our CanView platform and we are constantly engaging with GPs and specialists, as we are just at the beginning of our growth,” he said.

“Based on the feedback, medicinal cannabis is mainstreaming, with many doctors willing to learn and prescribe compared to the last few years.”

Shares in Cronos, which spiked following its results announcement, were further buoyed this week following a “buy” rating from broker Bell Potter.  The positive message saw shares rise sharply to $0.58c before falling away yesterday to close the day’s trading at $0.54c.

In its note to investors, Bell Potter lauded the CanView platform as the “key driver” of the growth.

“We initiate coverage on Cronos with a buy recommendation,” the note said. “We expect the momentum observed in FY22 to continue into FY23 and translate into strong revenue and earnings growth. Cronos is currently the only profitable, dividend-paying medicinal cannabis company on the ASX and the valuation does not appear demanding relative to the expected growth.”

While Cronos has become the first medicinal cannabis firm to pay a dividend, Cocks predicted others will also succeed – but not all.

“Like any hyper growth industry we have seen a lot of people move into the industry and establish operations, some will succeed, some will not and others will merge,” he said.

“This cycle has repeated itself in other sectors. We know there will be a thriving industry for the long term and Australia is developing medicinal cannabis professionals that will lead and take the industry forward.

Half of Australia’s pharmacies are on the CanView platform

“The CanView platform is also seeing a clear network effect, and as more patients, prescribers, pharmacies and suppliers are onboarded to the platform, the value of the platform to each of these stakeholders increases.”

The Motley Fool chief investment officer Scott Phillips said the performance of Cronos indicated that “some parts” of the industry are maturing. 

“It’s notable that Cronos is paying a dividend, both as a sign of its profitability and its confidence in its balance sheet strength and future prospects,” he said. “Of course, there’s no guarantee that they’ll keep paying one, either at the same level, or at all, but given the profitability and healthy cash balance, it’s a clear positive.

“It does seem that at least some parts of the industry are maturing, which is a good sign for ongoing business performance and for investor sentiment in the sector.”

Steve has reported for a number of consumer and B2B titles over a journalism career spanning more than three decades. He is a regulator contributor to health journal, The Medical Republic, writing on...

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