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As on 3rd December 2018, MMJ Group Holdings Limited (formerly MMJ PhytoTech Limited), (ASX:MMJ), a cannabis investment company, shared its intention to not renew its expired notice of intention of selling shares held in Harvest One Cannabis Inc (TSX-V: HVT), a global cannabis company. Â Founded in 2014, MMJ Group focuses on investments in cannabis-related sectors such as healthcare, logistics, processing, cultivation, technology, and retail and is also involved in clinical research & testing operations.
This strategy is in continuation to MMJSâs intention to sell up to 5 million shares, as announced on 1st November 2018. The proceeds from share sale was planned to be diverted to other profitable investment opportunities. Pursuant to the notice, MMJ had even disposed of 9,35,000 of its Harvest One shares over a month. However, MMJ changed its business plan as Harvest One recorded strong financial performance for Q1 2019 with whooping $1.68 million revenue, an impressive increase of 862% compared to Q1 2018 and a 227% increase from the previous quarter.
The strikingly strong results can be attributed to execution of roll-out strategy, efficient leadership change, bulk cannabis sales to other licensed producers, positive result in Phase 2 clinical tests of Satipharm capsules for epilepsy treatment, strategic acquisition of Phytotech Therapeutics and expansion of sites in British Columbia and Saskatchewan. As of September 2018, Companyâs balance sheet depicts strong cash balance numbers of $48.3 million, which clearly demonstrates companyâs ability to support its growth and diversification plans.
Harvest One owns three major subsidiaries - United Greeneries, a Licensed Producer; Satipharm and Dream Water. The Companyâs medical and nutraceutical arm continues to be enhanced with the recent acquisition of PhytoTech Therapeutics Ltd. On November 14, 2018, it entered into a multi-year Extraction Services Agreement with Valens GroWorks Corp for cannabis extraction and value-added services. On September 28, 2018, it made an investment in Burb, a new BC-based retailer of cannabis and cannabis-related products. Under the terms of the investment agreement the Company invested $1,750,000 to acquire a 19.99% ownership interest as well as five-year warrants which will allow the Company to increase its equity position by a further 11.50% in the future.
Currently, MMJ has 30.5% shareholding in Harvest One, possessing 55,557,994 shares. Its current strategy is to continue to remain Harvestâs major shareholder and supports its business expansion plans. MMJâs management has strong confidence in new leadership of Harvest One to deliver robust financials and growth in near future, leading to an increase in the value of its shareholding.
MMJ stock traded flat on December 05, 2018.
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