New European cannabis license for MGC Pharma
ASX listed medical cannabis company MGC Pharma has spread its wings into the Czech Republic after inking a deal to acquire Panax Pharma, a company that holds a medical cannabis breeding license in that country.
Panax’s license gives it access to up to 1,000m2 of growing space in the state-of-the-art 8 million Euro Vukoz Research Institute growing facility and laboratory established in January 2007 by the Czech Ministry of the Environment.
Panax also has the rights to the handling and disposal of cannabis waste product from the research and growing facility under a special license agreement that allows them to extract and export “CBD” or cannabidiol from the biomass.
The deal will greatly enhance MGC Pharma’s production capabilities allowing it to grow medical grade cannabis continuously whilst experimenting with new strains for its genetics database.
Medical Cannabis is rapidly gaining credibility around the world as a bit of a wonder drug that may have unusual characteristics that are suitable for treating a whole range of conditions.
There is now some evidence to suggest that medical cannabis can be used to reduce nausea and vomiting during chemotherapy, to improve appetite in people with HIV/AIDS, to treat chronic pain and muscle spasms and a host of other ailments.
Countries that previously had prohibitions on the use of medical cannabis are now falling over themselves to legalise it with a view to promoting research into its myriad of medical uses.
The use of medical cannabis is now legal in Austria, Canada, The Czech Republic, Finland, Germany, Israel, Italy, the Netherlands, Portugal and Spain.
Interestingly Australia just passed a law legalizing the use of medical cannabis and in a rare show of unity it was passed on a bipartisan basis.
Cannabis contains two main ingredients that are of use to the medical community, cannabinoid or CBD and Tetrahydrocannabinol or THC. THC is the psychoactive constituent in marijuana that is sought after by recreational users.
MGC Pharma’s research is in part about mixing increasing and decreasing doses of both CBD and THC to determine the correct levels of each that are necessary to treat different medical conditions.
The problem for most research houses however is that a lot of medical marijuana licenses restrict the amount of THC that can be grown.
AS Panax’s license does not restrict the amount of THC that can be grown, MGC Pharama will now be able to leapfrog many of their competitors in this increasingly crowded space.
MGC Pharma will acquire the first 25% of Panax for nothing but in return will share their own research and learning’s with Panax.
MGC will then be issued another 55% of Panax in return for funding their next year’s operating costs capped at Euro700 000 and they will then have the option to take out the last 20% of Panax in return for Euro800 000 worth of MGC stock.
Whilst the medical uses of cannabis are now starting to be recognized around the world it is also well recognized as the active ingredient in skin care products given some of its unique characteristics.
MGC have a current license to grow medical cannabis in Slovenia albeit with THC restrictions and whilst they are progressing with their medical research they have also formed a 51:49 joint venture with well credentialed cosmetic manufacturer, Natura Laboratories in Slovenia that looks like it could be quite profitable.
The company is now in production with a whole range of skincare products including hand creams, facial serums and creams, eye serums, soaps, toners and cleansing milks.
With individuals and companies around the world clambering to get a part of the medical cannabis action, MGC appears to have already navigated the hurdles and picked the winners in what looks to be a lucrative market place moving forward.
MGC Pharmaceuticals (MXC)
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