MMJ backs up intent with cash
Biotech company MMJ PhytoTech (ASX:MMJ) has given the most concrete evidence to date that it’s serious about a market entry into Australia – raising $5 million for the task.
It told its shareholders earlier today that it had issued just a shade over 20.8 million shares at a 20% discount on the 15 day volume weighted average price of the stock to institutional investors keen for a slice of the action.
While the $5 million has been raised for a market entry, some of the cash will be put aside toward a phase two trial of its Pro-Nano-Liposheres oral capsule in Israel.
The company had hailed the phase one trial as a success – especially when compared to market leader Sativex.
The bulk of the money, however, will go towards an Australian market entry – although MMJ has yet to spell out exactly what form this would take.
MMJ first flagged its intention to enter the Australian market back in October last year on the back of state-based legislative moves around the legalisation of medical cannabis.
Legislation passed through the federal senate last week, which among other things moved cannabis into the same restricted drug class as morphine instead of being classed as an illicit drug.
Also on the regulatory front MMJ hailed a recent federal court ruling in Canada which effectively gives the Canadian government six months to introduce a new or parallel federal medical cannabis regime.
The case which brought about the ruling was based on limitations on access to the current regime, including a ban on personal cultivation for patients with a prescription.
Instead of being alarmed at the prospect of individuals growing their own supply, MMJ said the move would invigorate the space – comparing home cultivation to the home brew of beer.
It pointed to its plan to supply genetic and quality testing services, which it said could be extended to individual patients rather than commercial growers.
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