MMJ Phytotech Limited (ASX:MMJ) CEO Jason Conroy provides an update on the company's investment portfolio, key holding in Canadian Harvest One Cannabis and regulatory change.
Jessica Amir: Hi. I'm Jessica Amir with the Finance News Network, joined by MMJ Phytotech's new CEO Jason Conroy. Hi, Jason. Welcome.
Jason Conroy: Hi. Thank you. Thanks for having me.
Jessica Amir: For new investors, just give us an introduction to the company.
Jason Conroy: MMJ Phytotech is a cannabis investment company with a market capitalization of around $100 million dollars. It owns a portfolio of five investments. Its main investment is a 34% shareholding in Harvest One. Harvest One is a listed company in Canada focused on the medical and recreational markets. Our investment focus is to invest across the cannabis value chain looking for minority shareholdings where we can influence value and create opportunities for growth.
Jessica Amir: Jason, maybe you could just tell us why you're really focusing on Canada.
Jason Conroy: Well the Canadian market opportunity is expected to exceed $20 billion dollars. Our investments are very well placed to capitalize on that.
Jessica Amir: Jason, you're just days into your role. Just tell us what attracted you to the company.
Jason Conroy: I am new to the cannabis sector. My previous role was Group CFO of DUET Group, which was taken over last year at an attractive premium for shareholders. It involved a lot of work over nine years involving corporate finance, recapitalizations, capital management, and MNA. That school base is directly relevant to MMJ as it looks to actively manage its portfolio in future years and grow its portfolio. I was attracted to MMJ because of its exposure to a very large Canadian market which is legalising later this year.
Jason Conroy: Now to your portfolio. Just tell us about your investments starting with eSense Lab.
Jessica Amir: We took a small 3% shareholding in eSense last year at the time of reaching a collaboration agreement between themselves, MMJ, and Harvest One, with a view to developing intellectual property and future cannabis market products. It's a small investment, but we think its got a lot of value going forward.
Jason Conroy: Now to Weed Me.
Jessica Amir: Weed Me was a recent investment, which we took virus secured convertible note in that business, which will give us a significant minority shareholding as that business grows. It's focused on replicating the business model of Harvest One where it becomes a horticultural producer of cannabis in the Canadian market.
Jason Conroy: Another Canadian company, Dosecann.
Jessica Amir: Dosecann, similarly we've taken a secured convertible note position in that business. It's a private company based in Canada. It's focused on extraction facilities to develop new products for the market. We're very excited about that opportunity.
Jason Conroy: Now to a strategic holding with Harvest One. Just tell us about their capital raising and any recent progress.
Jessica Amir: MMJ owns 34% of Harvest One. Harvest One is listed on the TSX Inter exchange in Canada so it is a public company. It has recent success in capital raising. It's raised over 80 million dollars to fund its future growth. Focused on expanding its production facilities. MMJ is very comfortable with its strategic position in Harvest One. We expect our position to be diluted over time as Harvest One continues to raise capital to fund further growth initiatives and as various convertible instruments on issue in the business are converted into ordinary shares. That said, we see significant value and upside in our position in Harvest One as it funds its capacity and its growth.
Jason Conroy: Now can you tell us about your offshoot company Phytotech Therapeutics.
Jessica Amir: Phytotech is our research and development arm. It is working very closely with Satipharm, which is the medical cannabis arm of Harvest One. Specifically, at the present time, Phytotech is conducting a phase two clinical trial of Satipharm's CBD capsules, which is focusing on reducing the levels of seizures in children that suffer from epilepsy. That study is due to be completed during the course of this year.
Jessica Amir: Lastly Jason, what can investors expect in terms of news flow over the coming six months.
Jason Conroy: They'll be expecting updates on our investments and how they're progressing with their growth initiatives. As well as news flow regarding the clinical trials that I've mentioned. As well as new investments that we're looking to make.
Jessica Amir: Well Jason Conroy, thank you so much.
Jason Conroy: Thank you.