MGC Pharma to grow CBD and THC strains under new Maltese licence
Special Report: MGC Pharma is set to grow its own THC and CBD strains of medicinal cannabis under a new agreement to build a 4,000 sq m hub on the Mediterranean island of Malta.
The company (ASX:MXC) today announced it was one of just 5 companies – and the only from Australia – to be awarded a full medical cannabis and cultivation contract by the Maltese government following a competitive tender process.
At present, the company’s lines of pharmaceuticals are based on cannabidiol (CBD) produced at its existing European facilities, but under the agreement the company will also be permitted to produce strains and flowers with unrestricted levels of tetrahydrocannabinol (THC).
Co-founder and chief Roby Zomer told Stockhead the combination of the two had plenty of potential for new products.
“Excitingly, with any CBD and THC strains of medical cannabis permitted under the agreement, we are now able to develop additional pharmaceutical products, which use the benefits of both CBD and THC,” he said.
“This contract provides MXC with a large commercial cultivation site in the European Union, completing the Board’s strategy to operate a full vertically-integrated medical cannabis operation in Europe, without any restriction on THC content.”
Cannabis produced at the facility will be used by MXC in the production of its pharmaceutical products for global markets, enabling also the supply of medical cannabis flowers directly into emerging European markets.
It comes as the Maltese government last month passed an initial bill to legalise the use of cannabis for medical purposes – final review is currently taking place and is expected to be passed shortly.
As part of the agreement, MXC is required to spend a minimum of $6.5 million over the first three years on construction and operations of the facility, and also employ a minimum of 25 local Maltese people.
Announcement of the new facility comes in hand with a $5 million capital raise to sophisticated and professional investors, and strategic funds at 7c a share. The capital raise was led by Bell Potter, one of Australia’s largest stockbroking houses.
That’s just shy of Tuesday’s closing price of 7.5c.
Funds raised will be used to establish the Malta facility and to further its work at its existing manufacturing facility in Slovenia.
Just last month the company commenced production of its first batch of CannEpil – its lead pharmaceutical product for epilepsy.
The Good Manufacturing Practice (GMP) checks will be carried out on this first batch – allowing for full-scale commercial production of the product and cementing MGC Pharma as the only one in Europe to be certified to this level for medical cannabis production.
This special report is brought to you by MGC Pharmaceuticals.
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