MGC Pharmaceuticals Ltd (ASX:MXC) has successfully raised over $5 million via a share placement to sophisticated and professional investors at 7 cents per share.
The oversubscribed placement received strong support from new and existing shareholders and was cornerstoned by the Merchant Opportunities Fund.
New medical cannabis production facility in Malta
MGC will use the new funds to contribute to the construction of a fully-licensed medical cannabis facility in Malta.
The company has been awarded a contract by the government of Malta to construct a 4,000 square metre state-of-the-art medical cannabis production and cultivation facility.
MGC is one of only five companies, and the only company from Australia, to be awarded a full medical cannabis production and cultivation contract, following a competitive tender process.
Cannabis-based pharmaceutical products for global markets
Under the agreement, the company will be permitted to produce all THC (tetrahydrocannabinol) and CBD (cannabidiol) strains of medical cannabis.
This will expand the commercial opportunity for MGC to develop additional medical cannabis pharmaceutical products into key European and global markets.
Cannabis produced at the facility will be used by MGC in the production of its GMP-grade pharmaceutical products for global markets including Australia.
The facility is also expected to enable the supply of medical cannabis flowers directly into the emerging European markets, including Germany.
Changes to Malta’s medical cannabis laws
The Malta contract terms require MGC to spend a minimum of about US$6.5 million over the first three years on the construction and operations of the medical cannabis facility.
The contract terms will be governed under the final legislative changes to Malta’s medical cannabis laws which are currently in final stages of a parliamentary process.
READ: MGC Pharmaceuticals commencing production of CannEpil for epilepsy
MGC recently commenced production of its first batch of CannEpil at its European medicinal cannabis facility.
CannEpil is MGC’s first pharmaceutical-grade medical cannabis product targeting people with drug-resistant epilepsy.
Once the distribution of CannEpil commences, it is expected to generate more than $1 million in annual sales in the Australian market in its first year.