MMJ Group Holdings (ASX:MMJ)

MMJ Group was up 9.37% today, after making a follow on CA$1 million investment in Canada’s largest unlisted cannabis stock Weed Me from its initial investment in 2017.

The investment is in the form of an unsecured convertible note to fund the company’s business plan rollout and position Weed Me for a liquidity event of either public listing or sale of the business.

Weed Me has expanded its operations with net sales of CA$6.9 million in the year ended 31 December 2020 (FY20), compared to FY19 net sales of CA$ 2.6 million.

And MMJ says this rate of growth has increased in FY21, with net sales of CA$ 14.1 million in the nine months ended 30 September 2021 compared to CA$4.1 million in the nine months ended 30 September 2020.

As of 31 October 2021, MMJ has generated a total return of 3.4 times on its investment in Weed Me.

“The follow-on investment in Weed Me demonstrates MMJ’s expertise to secure a private negotiated investment in unlisted businesses which are not generally available to Australian retail and institutional investors,” MMJ chairman Peter Wall said.

“The investment in Weed Me will assist the further expansion of Weed Me’s sales growth and maximise the value on the ultimate exit of MMJ’s investment.”

The key terms of the convertible note are:

  1. A cash yield of 8% per annum;
  2. Maturity date of 9 May 2023; and
  3. Conversion at MMJ’s option1 prior to maturity.

MMJ has also been issued 230,415 warrants convertible into 230,415 Weed Me shares each at CA$2.17 with an expiry date of 29 October 2024.

 

Creso Pharma (ASX:CPH)

Creso announced it has completed the integration of ImpACTIVE CBD assets for professional and amateur athletes into its product portfolio, ahead of the proposed product launch into the US – as well as filing an application with the US Patent and Trademark Office (USPTO) and international trademark registration.

The company says the ImpACTIVE assets have allowed it to ‘significantly strengthen’ its range of leading CBD products and will provide additional opportunities to strengthen its North American footprint.

It added that the addressable global market for CBD products in sports is set to reach $22 billion by 2022.

“The acquisition of the assets of ImpACTIVE was a major development for Creso Pharma as we saw significant potential based on the product suite and the strength of the management team,” Creso non-executive chairman Adam Blumenthal said.

“It also highlights our ongoing commitment to an imminent US market entry particularly ahead of our potential NASDAQ dual listing.

“I look forward to continuing to work with the ImpACTIVE team in order to further advance the Company and start to scale up sales into a growing market.”

Creso has also commenced stability testing on the assets with the results expected to highlight a potential 24-month shelf life for products, underpin ongoing international expansion efforts and add to the growing body of evidence for CBD.

The company has also submitted tender applications to CVS and Walgreens retail and pharmacy chains.

 

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