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- ASX investor MMJ Group has bought up 8.5 per cent of Ontario based company WeedMD’s convertible debenture units
- WeedMD is a federally recognised medical and recreational hemp producer
- The company holds a 158-acre greenhouse and 26,000 square production facility, both in Ontario
- MMJ’s CA$6 million debenture purchase in WeedMD poses an eight per cent growth rate, allowing the company to convert for 3.75 million shares in three years from now
ASX investor MMJ Group officially dished out CA$6 millon today to get its foot in the Canadian hemp industry.
The purchase grants the company 8.5 per cent of Ontario based company WeedMD’s convertible debenture units.
WeedMD is a federally-licensed producer of hemp products and strains for medical and recreational use.
The company operates a 158-acre greenhouse in Strathroy and a 26,000 square foot production facility in Aylmer — both situated in Ontario.
“This is another example of MMJ’s strong market and financial discipline identifying opportunities and bottlenecks in the cannabis value-chain in markets and acting quickly,” MMJ Chairman Peter Wall said.
“WeedMD was an opportunity for MMJ to invest in a highly attractive manner and which allows WeedMD to capitalise on being sufficiently funded for current cultivation operations and to build out its extraction facility.”
The debenture units purchased by MMJ cultivate at an eight per cent interest rate, posing a worth of 3.75 million shares in three years from now.
As part of today’s deal, MMJ is also able to purchase an additional 3.75 million shares at CA$1.80 apiece over three years. This is a premium to today’s price of the company in the Toronto Stock Exchange at CA$1.33 per share.
“WeedMD has executed its business plan quite well and has now expanded into outdoor cultivation and has well capitalized plans to become a provider of extracted cannabis products,” Peter said.
Late last-month, WeedMD reported net revenues of $8 million — representing a quarterly growth of 139 per cent.
MMJ funded the investment through its existing cash reserves of AU$20 million.
Shares in MMJ on the ASX today are trading 2.08 per cent higher for 24.5 cents per share. The company’s market cap is currently valued at $54.35 million.
