MMJ PhytoTech (ASX: MMJ) has made another strategic investment in a Canadian pot company – this time, in Dosecann, which has a 45,000 square foot pharmaceutical production facility in the pipeline.
In addition to the facility, Dosecann plans to obtain licensed dealer status by May to import and export cannabis, as well as gain licensed producer status to take advantage of the incoming recreation use laws in July this year.
Under the agreement, MMJ will purchase C$2.5 million worth of secured convertible debenture units in Dosecann. The debentures are convertible into shares and warrants in Dosecann and have a pre-money valuation of C$11.5 million.
“We are very pleased to be presenting this latest investment opportunity, as we believe Dosecann’s experienced management team and aggressive expansion plans have the potential to create considerable value for our shareholders in the near-term,” MMJ managing director Andreas Gedeon stated.
Dosecann has scheduled the first stage which comprises 20,000sq ft of the planned 45,000sq ft pharmaceutical production facility for completion in June.
Once the GMP-compliant building has been completed, it will contain a level nine security vault, research and development and extraction lab, as well as filling, packaging and distribution capability including import and export capabilities.
Mr Gedeon said the acquisition was part of MMJ’s strategy to increase its exposure to Canada’s rapidly maturing Canadian cannabis sector.
“We believe this investment in Dosecann, coupled with our existing holding in Harvest One, is a significant step towards achieving this objective,” Mr Gedeon added.
Harvest One Cannabis
MMJ’s interest in Harvest One Cannabis (CVE: HVST) equates to more than 53 million shares.
Harvest One has two primary subsidiaries United Greeneries, which has a production facility for growing cannabis for Canada’s medical marijuana sector and Satipharm, which is developing cannabis-based and pharmaceutical-grade products.
In late December, MMJ also hooked a stake in another private Canadian pot stock Weed Me after purchasing C$2 million convertible debentures in the company.
Weed Me aims to become a licenced cannabis producer after its completed fitting out its 8,000sq ft growing facility.
According to MMJ, Weed Me has developed unique cultivation techniques to carry out a low cost and robust operation.
Shares in MMJ were sitting at A$0.53 in mid-afternoon trade – up almost 5%.