Chapmans completes strategic investment in medical cannabis group, MJ Life Sciences

By Zoe Gross. Published at Sep 25, 2017, in Small Caps

Diversified investment group, Chapmans Limited (ASX:CHP), has today announced the company’s successful completion of its strategic investment in MJ Life Sciences (MJLS).

MJLS is an Australian special-purpose company established with the aim of becoming a leading global medicinal cannabis holding and investment company.

It is also a direct investor in Caziwell Inc., owner of the established North American medicinal cannabis brand and business, Aunt Zelda’s, with convertible note rights of up to 49.99% in Caziwell Inc.

Prior to CHP’s investment, MJLS had been founded and owned by three of the leading names in the burgeoning Australian and global medicinal cannabis space: Harry Karelis, Jason Peterson and Dr Stewart Washer, founders and/or directors of Auscann Group Holdings Limited (ASX:AC8), Zelda Therapeutics Limited (ASX:ZLD), CannPal Animal Therapeutics Ltd, and specialist cannabis medical clinic operator, CliniCann Ltd.

Between them, these major players have expansive regulatory, technical, operational and transactional experience in the industry.

CHP’s opportunity to invest directly in MJLS is highly advantageous, as well as consistent with its strong conviction and capital growth investment philosophy, enabling direct exposure to its future investments in the rapidly growing global medicinal cannabis landscape.

This company is in early stages of development and remains a speculative investment option, so investors should seek professional financial advice if considering this stock for their portfolio.

The investment also represents a significant value accretive transaction for CHP, paving the way for a strategic long-term partnership with MJLS.

Under the terms and conditions of the investment:

  • Chapmans has invested AUD 631,313 (reflecting the AUD equivalent of USD 500,00 in exchange for a 50% equity holding in MJLS; and
  • Chapmans has the right to equal board representation to the existing MJLS shareholders and will control 50% of the board with the existing MJLS shareholders collectively controlling the remaining 50% of the board

The MJLS investment has been funded from the proceeds from the placement announced by the company last week and existing capital.

MJLS’s board of directors will be reviewing its investment strategy and focus, with a view to securing additional medicinal cannabis opportunities in the near term ahead of a potential ASX listing in 2018.

CHP executive chairman, Peter Dykes, said: “Chapmans shares common investment principals and goals with MJLS and is delighted to be working with such experienced medicinal cannabis industry experts seeking to capitalise on clear and compelling growth market opportunities.”

Similarly, Harry Karelis, executive chairman of Zelda Therapeutics and executive director of Auscann, said: “MJLS welcomes the opportunity to join forces with Chapmans with whom we have clear alignment in investment approach and objectives. We are delighted to have completed this initial investment as scheduled and now look forward to immediately progressing to secure further compelling and unique investment opportunities in the burgeoning medicinal cannabis industry.”

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