MMJ PhytoTech (ASX: MMJ)
With medical cannabis being legalised around the world and recreational cannabis following suit, it is a good time for licenced cannabis producers to be gearing up for growth.
Canada is leading the legislative charge and that is exactly the market MMJ Phytotech (ASX:MMJ) is targeting as it seeks to become a large-scale cannabis producer targeting supply to a large North American recreational market.
To give itself the strongest position it can in Canada, MMJ has pulled the trigger on an acquisition deal for its Satipharm and United Greeneries subsidiaries to list on the TSX Venture Exchange (TSX-V) via a C$42M acquisition of TSX-V-listed shell company Harvest One (TSX-V NEX: WON.H).
The deal will establish MMJ as a well-financed, growth-driven cannabis company supplying burgeoning Canadian and international markets.
Via this deal, MMJ might also tap into the Canadian equities markets where circa CAD$200M has been raised, which given the advanced regulatory environment, is a bullish market for cannabis related stocks.
In what is a good sign for MMJ, the principals of Harvest One were also overseers of Potash One Inc., which sold for C$430M in 2011 – so they must know Canadian markets well…
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Having recently raised A$4M in an oversubscribed share placement, which was strongly supported by a number of well-regarded institutional backers, MMJ looks to gearing up to really make its mark in the production and supply of cannabis to not only Canadian, but also global markets.