MGC Pharma (ASX: MXC) has grown its medical cannabis production capabilities after the Maltese Government gave the company the go-ahead to construct and operate a medical cannabis facility in Malta.
The Maltese Government awarded MGC a contract to develop the 4,000 square metre facility after a competitive tender process.
MGC was one of only five companies to be granted a contract to build and operate a licenced medical cannabis facility in the country.
“This contract provides [MGC] with an attractive new cultivation site in the EU, completing the board’s strategy to operate a full vertically-integrated medical cannabis operation in Europe,” MGC co-founder and chief executive officer Roby Zomer said.
Under the contract terms, MGC must spent about A$6.5 million on developing and operating a medical cannabis cultivation and production facility.
MGC must also employ 25 Maltese people within its local workforce.
Once the facility is operational, MGC will produce THC and CBD medical cannabis strains for incorporation into existing and new medical cannabis pharmaceutical products.
“Excitingly, with any CBD and THC strains of medical cannabis permitted under the agreement, we are now able to develop additional pharmaceutical products, which use the benefits of both CBD and THC,” Mr Zomer said.
The products will then be sold into EU and global markets and Mr Zomer said the contract allowed the company to also sell its medical cannabis flowers throughout the region, including Germany.
MGC tops up cash reserves
To fund construction of the facility, MGC undertook a A$5 million capital raising at A$0.07 per share, which was oversubscribed.
Once the placement has been finalised, MGC will have A$12 million in cash to go towards developing the Malta facility and its other short-term plans.
CannEpil manufacturing underway
Today’s news comes after MGC reported late last month, it had received interim Good Manufacturing Practice certification to produce its first batch of CannEpil at its European medicinal cannabis laboratory and manufacturing facility.
Production of the first batch began immediately and MGC was planning to analyse and validate the final product before passing it on for independent inspection.
Once the GMP regulatory body has identified MGC has followed protocols during production of the CannEpil, MGC will receive full GMP certification for its Europe-based facility.
The company will then be able to begin full-scale production of CannEpil and other pharmaceutical-grade medical cannabis products.
CannEpil was develop for sufferers of drug-resistant epilepsy. This form of epilepsy impacts about 30% of those diagnosed with the disorder in Australia.
More than 100 patients have registered in Australia to receive CannEpil and MGC anticipates about A$1 million in revenue during the first year of the drug’s distribution.
By late afternoon trade, MGC’s share price had risen 12% to A$0.084.