Tech fireball 1 Page just announced it’s getting into the cannabis game
Health & Biotech
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HR technology fireball 1 Page — which had a spectacular rise and fall in 2016 — is transitioning into a pot stock.
1 Page announced this morning it had signed a conditional deal to buy a German medical marijuana group, HAPA Medical Group, and change its name to European Cannabis Corporation.
“HAPA is an early mover in the German medicinal cannabis market and is focused on offering its own pharmaceutical GMP-grade THC & CBD product lines to German patients through a HAPA owned network of medical cannabis clinics throughout Germany,” 1 Page reported.
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.
“We have a goal to become a $US1 billion ($1.1 billion) NASDAQ-listed company and I want to still own a fair slab when we get there,” co-founder and chief executive Joanna Riley told the AFR on its listing day.
By March 2017, however, the stock had dropped all the way back to 15.5c as Mrs Riley tried — and failed — to roll the board. It was described by the board at the time as “her intention to continue to burn cash”.
Ms Riley ceased as a substantial shareholder in August when she sold $2.6 million in shares. In December, she stepped down as CEO “to focus on strategy and business development”.
1 Page will hand over 90 million shares (currently worth 16.5c each) and €1.3 million ($2 million), of which €430,000 has been paid as a non-refundable deposit.
HAPA’s founders will come away with 37 per cent of the new company. Their shares would be escrowed for three years.
The company would be valued at $38.6 million based on the last traded price of 1 Page’s shares.
The deal depends on a number of conditions including due diligence and regulatory approvals.
“Following changes to Germany’s laws in 2017, the medicinal cannabis market is quickly growing and HAPA has positioned itself to be at the forefront of these developments,” 1Page told investors on Friday morning.
“Laws legalising the broad use of medicinal cannabis were passed in Germany in March 2017 and with a population of 83 million people, Germany is estimated to have the potential to become the world’s single largest medical cannabis market.”
The new company would have about $23 million cash on hand — “sufficient capital to execute its plans in relation to the growth”, the company said.
1-Page will be the ASX’s 22nd cannabis company.
It’s a sector that has attracted serious players such as Cann Group (ASX:CAN) and AusCann (ASX:AC8), both backed by the top two Canadian pot stocks, and companies jumping into the hype-cycle.
Capital Mining (ASX:CMY) dropped plans to get into the sector last year, while others such as Atlas Pearls (ASX:ATP), Chapmans (ASX:CHP) and LifeSpot Health (ASX:LSH) made well-publicised announcements about cannabis adventures which have so far proved to be minor.