MGC secures cannabis build contract in Malta

11/04/2018 - 12:19

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ASX-listed MGC Pharmaceuticals announced today that is has been awarded a contract to build a medical cannabis production facility in Malta, with a $5 million capital raising set to help fund the project.

MGC secures cannabis build contract in Malta
MGC will build a 4,000 square metre medical cannabis production and cultivation facility.

ASX-listed MGC Pharmaceuticals announced today that is has been awarded a contract to build a medical cannabis production facility in Malta, with a $5 million capital raising set to help fund the project.

Under the contract with the Maltese government, MGC will construct a 4,000 square metre production and cultivation facility.

The Perth-based company said cannabis produced at the facility would be used in the production of its GMP-grade pharmaceutical products for global markets including Australia, and would enable the supply of medical cannabis directly into Europe.

“This contract provides MGC with an attractive new cultivation site in the European Union, completing the board’s strategy to operate a full vertically-integrated medical cannabis operation in Europe,” chief executive Roby Zomer said

“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.

“In addition to being used in the production of MGC’s GMP-certified pharmaceutical products, this contract extends the medical cannabis market for MGC into the supply of medical cannabis flowers to emerging European markets, including Germany.”

Malta legalised the use of cannabis for medical purposes in March.

Under the contract, MGC must spend a minimum of approximately $6.5 million over the first three-year term on the construction and operations of the facility, and must employ a minimum of 25 Maltese people as part of the local workforce.

Meanwhile, the company also announced it had raised $5 million via the issue of 71 million shares at 7 cents each.

Bell Potter acted as lead manager to the placement, which was oversubscribed and was cornerstoned by Merchant Opportunities Fund.

Mr Zomer said the funds would be used in the construction phase of the Malta project.

Shares in MGC were up 10.6 per cent to 8.3 cents each at 2pm AEDT.

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