MMJ worked with its specialist management company, Embark Ventures, to evaluate the investment opportunity and WeedMD is the third investment made for MMJ.
Multi-channelled distribution strategy
WeedMD Inc is the publicly-traded parent company of WeedMD Rx Inc – a federally licensed producer of cannabis products for both the medical and adult-use markets.
The company owns and operates a 158-acre state-of-the-art greenhouse and outdoor facility location in Strathroy, Ontario.
WeedMD also operates CX industries, a wholly-owned subsidiary of Weed MD which operates out of the company’s fully licenced 26,000 square foot Aylmer, Ontario production facility.
The Canadian cannabis producer has a multi-channelled distribution strategy that includes selling directly to medical patients as well as maintaining strategic relationships across the seniors’ market and supply agreements with Shoppers Drug Mart.
MMJ’s investment consists of CAD$6 million in 8.5% unsecured convertible debenture units issued by WeedMD which may be converted into 3.75 million shares within three years.
MMJ has also secured the right to make further investments in WeedMD through warrants that allow MMJ to acquire an additional 3.75 million shares for CAD $1.80 each for a period of three years.
Settlement of the WeedMD investment is expected on or about September 26 and will be funded from MMJ’s existing cash reserves of AUD$20 million.