PhytoTech pays $20m for Canadian cannabis company

Tuesday March 24, 2015: PhytoTech Medical (PYL) shares jumped 20 per cent this morning  after the controversial medical cannabis company unveiled plans to acquire Canada-based medical cannabis group MMJ Bioscience for up to $20.7 million.

PhytoTech will issue shares worth $15.5 million (based on a share price of 30.5c) and another $5.18 million worth of performance shares subject to completion of certain milestones.

PhytoTech said the deal would create a vertically-integrated medical cannabis company ranging from cultivation of medical cannabis through to development and distribution of pharmaceutical and nutraceutical products.

PhytoTech will fund MMJ's working capital requirements until MMJ starts generating revenue, which it said was expected to be in July his year. But PhytoTech said it had enough money for this and would not need to raise further equity.

MMJ has two licences pending for production facilities in Canada and expects to start selling its over-the-counter cannabidiol dietary supplement pill in Europe from July.

PhytoTech managing director Boaz Wachtel said MMJ had the potential to be a key medical cannabis producer "within the near future".

PhyoTech shares were 6c higher at 36.5c this morning, but still a long way off the peak of 92c reach in February.


arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.