MMJ extends its Harvest One Cannabis investment
Global cannabis investment company MMJ Group Holdings Limited (ASX:MMJ) today announced that it has extended a loan to Harvest One Cannabis Inc. (TSX-V: HVT).
The group has also reported its Net Tangible Assets backing at February 29 as $0.221 per share, for a total NAV of $48 million and a total portfolio including cash of $50 million. As of 29 February, the group’s market capitalisation was $22 million, which has now dropped to just under $20 million given the recent market volatility.
MMJ manages a portfolio of investments along the cannabis value-chain. It owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail.
MMJ is the only listed Australian investment company which offers the opportunity to Australian investors to invest in unlisted and listed cannabis-related businesses in Australia and offshore.
The group has a proven track record in acquiring and realising considerable value from its cannabis related investments.
Since 2015, MMJ has created a significant number of investment opportunities from its connections in Canada and Australia in the private investment sector and realised exits when it is to the benefit of MMJ and its shareholders:
Here’s how MMJ’s investments sit across most of the cannabis and hemp value chain:
Harvest One Cannabis
MMJ allocate capital to potential market leaders, consolidators and takeover targets.
Harvest One Cannabis Inc. (TSX-V: HVT) is one such company that MMJ believes is significantly undervalued given its substantial cultivation and Cannabis 2.0 assets and are working closely with Harvest One to realise that intrinsic value.
The group today announced that it has reached agreement to extend the maturity date of the secured loan agreement with Harvest One. The loan, bearing interest at a rate of 15% per annum in the amount of C$2 million, was issued was on January 10, 2020, with the principal and accrued interest payable within 60 days.
The maturity date has now been extended by 90 days to 8 June 2020
In consideration MMJ will receive 17,083,333 warrants exercisable at a price per HVT share of $0.06 at any time until the earlier of a further extension or renewal of the loan, or two years (subject to approval).
MMJ is the largest shareholder holding 26% of HVT which is one of the largest investments within the MMJ cannabis and hemp portfolio.
Harvest One granted MMJ a security interest in all current and after acquired property of HVT and its subsidiaries, subject to certain permitted liens.
The extension of the maturity date will assist HVT to continue making significant progress in restructuring its operations and realising the sale of non-core assets. Harvest One is a global cannabis company that develops and provides innovative lifestyle and wellness products to consumers and patients in regulated markets around the world.