One-time tech high-flyer 1-Page — which was briefly worth $700 million in 2015 — has made a $2 million down-payment on its transformation into a pot stock.

The former HR software maker which underwent a dramatic rise and fall in 2015 and 2016 — made a €10 million move to buy German medical marijuana group HAPA Medical Group.

It will pay 90 million shares and €1.3 million ($2 million) in cash.

The man who was led the fight to roll the board last year, Andrew Chapman, says the decision to buy a German company was deliberate.

“The reason we’ve gone into Germany is the sheer scale,” he told Stockhead.

“The human population is naturally more liberal that most other countries in the world and medical cannabis was legalised there [in March] last year.”

Mr Chapman say the whole deal values HAPA at €10 million.

He cited Germany’s 83 million population (compared to Australia’s 25 million and Canada’s 36 million), and the fact that German health insurers fund certain applications of medical cannabis.

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Mr Chapman runs Merchant Group, a financial services firm in Perth that’s been involved in pot plays Zelda (ASX:ZLD), CannPal (ASX:CP1), MGC Pharma (ASX:MXC), AusCann (ASX:AC8) and Australia’s first medical cannabis venture, Ross Smith’s Phytotech (now MMJ Phytotech).

HAPA opened Germany’s first specialist medical cannabis clinic in Berlin on March 1, but is still waiting on a narcotics licence to sell products that contain THC.

Mr Chapman says they will open “a couple” more clinics before 1-Page relists.

HAPA earned about €100,000 in revenue on the first test batch of cannabidiol (CBD) products, sourced from Canada and Chile, which sold “literally within days”.

The path to relisting
1-Page — which is now suspended — was “moving toward relisting as soon as possible”, the group told investors on Tuesday.

It still owes HAPA’s sellers 90 million shares (worth 16.5c each) as part of the deal. HAPA’s founders will come away with 37 per cent of the new company, and their shares will be escrowed for three years.

They plan to hold a shareholder meeting in June to approve the deal, then begin the re-compliance process to get back on the bourse.

Mr Chapman says they aren’t sure yet how much they’ll have to raise from the market when they relist: it could be $1000 as under old ASX rules, but he suspects it’ll be closer to $1 million.

After that they will drop the name 1-Page and morph into “European Cannabis Corporation”.

Money rich, reputation poor

1-Page may still be suffering from the reputational fallout associated with its spectacular fall from grace, but it’s not poor.

The company estimated in February that it had $23 million to play with.

Mr Chapman said their wealth was a problem when trying to find deals.

“Everyone is your friend,” he said.

Silicon Valley based 1-Page surged 70 per cent on its ASX debut in 2014 — and then rapidly rose more than 2500 per cent to $5.69 in September 2016, amid intense speculation.

In its January quarterly report, the company said it was spending a bare minimum of its cash and solely on admin and corporate costs only.