News | News By Subject | News by Disease News By Date | Search News
Get Our FREE
Industry eNewsletter

MMJ PhytoTech Quarterly Update And Appendix 4C

11/1/2016 9:07:09 AM

  Life Sciences Jobs  
  • Newest Jobs - Last 24 Hours
  • California Jobs
  • Massachusetts Jobs
  • New Jersey Jobs
  • Maryland Jobs
  • Washington Jobs
  View More Jobs
Perth, Nov 1, 2016 - (ABN Newswire) - MMJ PhytoTech Limited (ASX:MMJ) ("MMJ" or "the Company") is pleased to provide its quarterly activities report for the period ended 30 September 2016.


- Proposed spin-out of Canadian subsidiary United Greeneries and Swiss subsidiary Satipharm by way of reverse takeover of TSX-V listed entity Top Strike Resources (TSX-V; TSR)

- MMJ enters strategic option agreement to lease 13-acre land package located directly adjacent to existing Duncan Facility

- Phase 2 Clinical Trial of PTL101 capsules to measure efficacy for reducing seizures in children with intractable epilepsy set to commence

- Appointment of experienced pharmaceutical executive Catherine Harvey as Chief Operations Officer

Duncan Facility Expansion Strategy

During the September quarter, MMJ advised that its wholly-owned subsidiary United Greeneries Holdings Ltd ("UG") had executed a binding letter of intent ("LOI") with Cowichan Tribes ("Cowichan") in respect to the leasing of a 13-acre strategic land package ('Expansion Land") located immediately adjacent to the Duncan Facility.

MMJ estimates that the Expansion Land could support up to 10 acres of greenhouse production space, potentially yielding approximately 25,000kg/year of cannabis, which is more than 25 times the current production capacity of the Duncan Facility. Together with the existing production capacity, the expanded Duncan Facility could produce up to 26,000kg of cannabis per year, which would position it as one of the largest cannabis cultivation operations in Canada.

Expanded production capacity would further strengthen the Company's supply chain and will play a key role in supplying the soon to be legalised Canadian recreational market, with conservative estimates forecasting annual sales of approximately C$5 billion.

As one of only 29 companies currently licensed to produce medical cannabis in Canada, MMJ expects to be well positioned as a first mover in this emerging recreational market.

Cowichan Agreement Overview

The LOI grants MMJ an option to lease 13 acres of the 40-acre strategic land package directly adjacent to the existing Duncan Facility until June 1, 2017. Additionally, the agreement provides MMJ with the capacity to increase the acreage beyond 13 acres if needed upon exercise of the option.

In consideration for the option to lease, the Company has agreed to pay Cowichan Tribes C$1,000 per month until the earlier of the expiry of the option on June 1, 2017, or the entry into a lease agreement.

Phase 2 Clinical Trial for Treatment of Pediatric Epilepsy

In August, MMJ advised that its wholly-owned, Israeli-based subsidiary PhytoTech Therapeutics Limited ("PTL"), was finalising preparations to commence a Phase 2 Clinical Study into the efficacy of its PTL 101 capsules in treating intractable epilepsy in children.

The PTL capsules contain organically derived, highly purified CBD (cannabidoil) and are utilising proprietary formulations developed through the Company's Gelpell product technology.

The Phase 2 study is expected to commence in Q4 2016 at a leading Israeli healthcare facility, and follows the successful Phase 1 Clinical Study which highlighted the safety and high performance of the Gelpell-CBD capsules.

If successful, the Phase 2 clinical trial results will be a key catalyst towards the commercial development of the PTL101 prescription drug for the treatment of intractable epilepsy in children.

MMJ is also in the final stages of preparing for the commencement of a Phase 2 Clinical Study into the ability of its PTL201 capsules to treat spasticity related symptoms associated with multiple sclerosis patients.

Proposed Listing of Core Cannabis Brands of TSX-V

On 28 September, MMJ advised that it had signed a binding Term Sheet with TSX-V listed company Top Strike Resources Limited (TSX-V: TSR) ("Top Strike"), for Top Strike to acquire 100% of the issued shares of United Greeneries and Satipharm AG ("Satipharm") respectively.

The proposed transaction, which remains subject to a number of conditions, including shareholder approval, is intended to provide MMJ shareholders with direct exposure to the rapidly growing recreational and medical cannabis markets in Canada.

Post spin out, MMJ shareholders will, through their shareholdings in MMJ, have an indirect ownership in a fully-financed, growth-focused cannabis company with two key operating brands in UG and Satipharm.

The aggregate sale price of UG and Satipharm (C$40 million) represents approximately 97% of MMJ's current market capitalisation (undiluted and based on a share price of A$0.24).

TSX-V Listing Highlights / Key Benefits:

- Post transaction, MMJ shareholders will have significant exposure to two of the largest commercial opportunities in the global cannabis sector;

- TSX-V listing to fast-track growth of both UG and Satipharm cannabis brands respectively, with robust growth pipelines and near-term revenue generating opportunities to be realised;

- Direct exposure to Canadian capital markets to be a significant value catalyst;

-- Since 1 March 2016 over $200M has been raised by MMJ's Peers

- Top Strike to be become a pure play TSX-V cannabis company with world-class brands providing penetration into evolving recreational and medical cannabis markets globally; and

- Combination of UG and Satipharm brands in the resulting issuer for capturing the entire spectrum of the Canadian recreational and medical cannabis market is expected to create a competitive advantage over single brand competition and to leverage Satipharm's oral delivery assets into the recreational market.

Canadian Recreational Market Opportunity

The Canadian medical cannabis market is one of the most highly regulated and favourable operating jurisdictions globally. At present, there are 34 approved companies operating under the current regulatory framework, of which 10 are publicly listed in Canada.

The medical cannabis market in Canada is expected to grow to C$3 billion in annual sales by 2024, with new patient enrolments in 2016 increasing by an average of 5,000 new patients per month - a total of 75,000 patients are enrolled at present.

A significant value catalyst for Licensed Producers ("LP's") will be the anticipated regulation of the Canadian recreational market, which has a conservative estimated value of circa C$5 billion per annum.

The Canadian government has committed to the introduction of the new recreational regulatory system by in the second half of calendar 2017. It is expected that existing LP's under the current regulatory framework will have a strategic first-mover advantage as early stage suppliers to this recreational market.

Corporate Overview

During the quarter, the Company advised that Mr Ross McKay resigned as a Non-Executive Director due to increased workloads associated with other business interests in Canada. The Board thanks Mr Mckay for his commitment and contribution towards the growth of MMJ over the past 12 months.

In August, MMJ appointed Catherine Harvey as Chief Operations Officer. In the role, Catherine will play a significant role in overseeing the daily operations of MMJ's key business divisions, with a focus on the execution of key international growth objectives.

Post quarter end, the Company announced that it had raised A$4 million (before costs) through the placement of 19,512,196 fully paid ordinary shares ("Placement") to institutional and sophisticated investors at $0.205 per share.

The Placement was well supported by a number of well-regarded institutional investors with the Company accepting over-subscriptions of A$2 million, which is a strong endorsement of MMJ's near-term development strategy and underlying value.

Management Commentary

MMJ's Managing Director, Andreas Gedeon, commented: "The September quarter was a highly productive period for MMJ, highlighted by the Company's proposal to list its core cannabis brands - United Greeneries and Satipharm AG - on the TSX-V via a reverse takeover transaction.

The Company strongly believes listing on the TSX-V will be a significant near-term value catalyst for existing MMJ shareholders, as it provides direct exposure to the rapidly expanding Canadian cannabis market which has an estimated value of approx. C$5 billion.

As the framework around the Canadian medical and recreational cannabis markets continues to evolve, a key focus for management has been on ensuring MMJ has the capacity to rapidly scale-up production. As a result, the Company has entered into a strategic expansion land package to acquire an additional 13 acres located directly adjacent to our Duncan Facility, effectively enabling Duncan to produce circa 26,000kg/year of cannabis.

MMJ's Israeli-based subsidiary, PhytoTech Therapeutics has also continued to make significant progress during the quarter, as it prepares to commence a Phase 2 Clinical Trial to test the efficacy of our PTL 101 capsules in treating intractable epilepsy in children.

I would like to thank our shareholders for their ongoing support, and the Board looks forward to providing further updates on the TSX-V listing and other key operational milestones in the near-term."

To view the full report, please visit:

WEB: Quarterly Update and Appendix 4C

About: MMJ PhytoTech Ltd

MMJ PhytoTech Limited (ASX:MMJ) is a Medical Cannabis company, which aims to commercialise Medical Grade Cannabis (MGC) and high potential cannabis based therapeutics products to the rapidly growing international market with regulated medical cannabis laws. The Company operates three subsidiaries with operations across the entire Medical Cannabis value chain, encompassing the Company's "Farm to Pharma" strategy. It's United Greeneries subsidiary has growing facilities in Canada and is fully integrated with Agrichem Analytical, its quality control and testing laboratory. Satipharm has a number of key international distribution partnerships for the distribution of cannabinoid-based pharmaceutical, nutraceutical and wellness products. Through its PhytoTech Therapeutics subsidiary in Israel the Company has an exclusive research and licensing agreement with Yissum, the prestigious Research Development and technology transfer Company of Hebrew University in Jerusalem, Israel, a global leader in medical cannabis research.

Read at

comments powered by Disqus