Bronson’s African weed deal up in smoke thanks to ASX rules
Health & Biotech
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Ex-cosmetics seller Bronson Group has failed in its initial punt to become a medicinal cannabis business, after a deal in Lesotho fell through.
In July, Bronson (ASX:BGR) — which recorded revenue of $45 in 2017 — agreed to buy the Pharmaceutical Development Company (PDC) in the Kingdom of Lesotho, effectively offering a backdoor listing.
Today Bronson told investors the deal had fallen through because they’d not been able to satisfy all of the re-compliance requirements around re-listing and quotation.
They’ve dropped the deal, saying they’re now looking at projects both in cannabis and out.
“However, as a sign of good faith, PDC and its shareholders have agreed to grant the company a right of first refusal to list PDC on ASX, until 30 June 2018, should PDC decide to re-commence the listing process during this period,” Bronson said.
ASX compliance head Kevin Lewis told Stockhead in an earlier interview that during the admissions process they look at where the holding company is and whether they can work with that jurisdiction.
The ASX also reserves the right to say no even if a company fulfils all of its requirements.
The company has been contacted for comment.
Why cannabis in Lesotho?
PDC has a very broad brief in Lesotho.
Its 10 year licence gave it permission to “cultivate, manufacture, supply, research, hold and transit cannabis, cannabis plant and cannabis resin as well as import cannabinoid seed for medical, scientific or other lawful use”.
“A key factor in considering the success of the Project is namely, that Lesotho has existing legislation in place that regulates the cultivation and transit of Product to and from Lesotho,” Bronson said at the time.
Prepping for a new lease on life
In September it hired Israeli corporate cannabis king Amit Edri as CEO and managing director.
Mr Edri was the COO of the largest medical cannabis processor in Israel, the Bazelet group. He’d also built a medical cannabis company from scratch.
Mr Edri has so far proven unwilling to talk about his move into African and Australian medicinal cannabis.
Bronson Group grew out of a cosmetics goods distributor that went bust.
Administrators were appointed last year, as the company shell was cleaned up and creditors cleared out.
Bronson may have made only $45 in fiscal 2017, from interest, but it recorded a $2.5 million profit.
This was thanks to creditors writing off $3 million in debts owed to them by Bronson.
Indeed, it even had $213,000 in cash on hand at June 30, thanks to the issue of 750,000 shares during the year.
Bronson’s shares haven’t traded since May last year.