MMJ’s Canadian cannabis investment Weed Me attracts new capital

By Trevor Hoey. Published at Mar 10, 2020, in Biotech

MMJ Group Holdings Limited (ASX:MMJ), a company that specialises in managing a portfolio of investments along the cannabis value-chain, advised on Tuesday that the privately owned Canadian cannabis business, Weed Me Inc. had completed a C$2.5 million capital raising.

MMJ Group has been an investor in Weed Me since December 2017 and it represents one of the largest investments within the company’s cannabis and hemp portfolio.

MMJ has a comprehensive and diversified interest in the cannabis and hemp industry as 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.

As we will discuss later, the value of the company’s net tangible assets represents a 150% premium to the group’s current trading range, suggesting there is scope for significant share price upside, particularly if positive sentiment towards the sector returns.

Established in 2016, Weed Me is a licensed producer of cannabis with indoor growing facilities in Ontario, and it holds cultivation, processing and sales licenses under the Cannabis Act from Health Canada.

MMJ non-executive chairman Peter Wall highlighted the significance of Weed Me’s ability to attract funding in the face of negative sentiment towards the sector over the last 12 months.

Wall said, “We congratulate the management of Weed Me in securing funding in challenging market conditions and believe that it reflects the quality of its business plan and its substantial cultivation assets.“

‘’We are committed to working closely with Weed Me to deliver superior returns.”

MMJ not afraid to lock in gains

MMJ has a demonstrated track record of making astute investments in the industry, as well as timing the realisation of gains to the advantage of shareholders.

For example, MMJ saw MediPharm LABS’s (LABS) potential to establish itself as a leader in cannabis oils extraction, investing C$5 million in shares and warrants.

As the company experienced substantial share price growth throughout 2018, MMJ realised a return of six times capital invested.

The company’s success in achieving these results is reflected in its net tangible assets (NTA) per share as at December 31, 2019.

The NTA of 23.5 cents implies upside of 150% to this morning’s opening share price of 9.5 cents.

As the following table indicates, MMJ’s targeting of Canada appears to be a right time/right place decision.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). 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.

Publishers Notice

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.

Australian ASX Small Cap stocks | Why Finfeed.com is Australia’s leading small cap publication

Founded seven years ago, Finfeed.com is Australia’s leading and longest standing website for investor and finance news, education and expert opinion.

Published by StocksDigital, Finfeed was created to report daily on the comings and goings of ASX listed stocks in the small cap market.

As the first digital publication dedicated specifically to this space, Finfeed soon became the most trusted publication in the market, quickly garnering over two million page views – a number that continues to rise.

Finfeed.com provides its readers with informative articles that tackle the latest in market moving #ASX small cap news, plus exclusive content you won’t find anywhere else. It is aimed at those with an interest in investing, market education, company performance, start-ups and much more.

Finfeed.com is the only media organisation operating under the strength of a Financial Services License and is backed by leading journalists and analysts all with brands of their own.

The website aims to inform, educate and entertain with content that drills down into the heart of financial matters.

Finfeed is a leading source of investor and market information, with everything investors need to know about how to invest written in a way that anyone can understand. 

Over the years, the website has expanded beyond exclusively reporting on small caps, to profile Australia’s leading ASX listed small, mid and large caps as well as some of the country’s most successful CEOs and business leaders to find out what makes them tick.

Every day you will find fresh content covering:

Fast Facts

Over 4,000 articles published

Over 2.3 Million Page Views and counting

Over 10,000 followers on social media

Subscriber list growing by 2% monthly

Thanks for subscribing!

X