Australian medical cannabis company PhytoTech Medical Limited has entered into a merger agreement with Canadian producer MMJ Biosciences Inc., making it the second publicly traded Australian company to enter the Canadian medical marijuana market this month.
The merger will create MMJ-PhytoTech, a vertically integrated medical cannabis company, the companies said.
PhytoTech, listed on the Australian Securities Exchange under the ticker symbol PYL, will acquire 100% of MMJ Biosciences for 68 million shares, or $21.8 million at current valuation. PhytoTech shares jumped more than 11% after the merger was announced on Wednesday before dropping 1.5% in trading today.
The company works with Israel-based research centers and has a licensing agreement with Yissum, a research and development company of the Hebrew University of Jerusalem.
MMJ Biosciences is the owner of United Greeneries, which has two facilities with a combined 78,000 square feet of growing space in different stages of licensing to become government-approved medical marijuana production facilities.
Capital Mining, a publicly traded Australian mining company, earlier this month said it would purchase 49% of Broken Coast Cannabis, a Canadian MMJ producer, for $7 million in cash plus $25 million in stock options. Broken Coast is one of only 14 companies allowed to grow and sell medical cannabis in Canada. Capital Mining also said it purchased Cannan Growers in its entirety for $250,000 plus $1 million in stock options.