MMJ subsidiaries: United Greeneries and Satipharm to list on TSX-V
Subsidiary divisions of medical cannabis company MMJ PhytoTech Limited (ASX:MMJ); United Greeneries Holdings Ltd and Satipharm AG, plans to list on the Canadian TSX-V exchange.
A binding term sheet has been signed between MMJ and the TSX-V listed company Top Strike Resources Limited (TSX-V:TSR), for Top Strike to acquire 100% of the issues shares in United Greeneries and Satipharm.
The planned reverse takeover remains subject to shareholder approval, due diligence and completion of the financing and execution of a definitive agreement.
MMJ shareholders will gain exposure to the rapidly growing recreational and medical cannabis markets in Canada.
Following the spin out, shareholders in MMJ will have indirect ownership in the fully-financed brands United Greeneries and Satipharm, whilst also gaining exposure to the Canadian market.
The aggregated sale price of United Greeneries and Satipharm (C$40 million) which represents approximately 97% of MMJ’s current market capitalisation at a share price of $0.24.
Since July 2016 MMJ share price is down 6% whilst peers are up 175% on average:
The listing of MMJ’s subsidiaries on the TSX-V exposes the brands to Canada’s capital markets that have seen over $200M raised since March 1st, 2016 by MMJ’s peers.
The Canadian cannabis market is one of the most highly regulated and favourable operating jurisdictions in the world. Of the 34 approved companies operating under the current regulatory conditions, only 10 are publicly listed in Canada.
The medical cannabis market in Canada is expected to grow to C$3 billion in in annual sales by 2024. An average of 5,000 new patients are treated with medicinal cannabis each month, with a total 75,000 patients currently enrolled.
The Canadian recreational market has a conservative estimate value of around C$5 billion per annum.
With the Canadian government committed to introduce new regulation surrounding recreational use of cannabis, MMJ’s subsidiaries may benefit from first mover advantage.
There is no guarantee these laws will be passed or will translate into commercial revenues for MMJ and its subsidiaries so please conduct your own due diligence and seek professional financial advice before making any investment decision.
MMJ expects the reverse takeover transaction to be finalised and listed on the TSX-V before the end of December 2016.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of Longhou Capital Markets Pty Ltd (AFSL No. 292464). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.