MGC Pharmaceuticals has raised $10 million to accelerate development of medical cannabis products and seek acquisitions.
The placement at $0.065 a share, a 25.29% discount to its last traded price of $0.087, was significantly oversubscribed by professional investors from Asia, Australia and North America, including the Merchant Opportunities Fund.
A short time ago, the shares were at 8 cents.
MGC Pharmaceuticals now has more than $13.5 million cash.
The funds will be used for clinical studies and the research and development of pharmaceutical-grade medical cannabis products.
The company is also aggressively assessing acquisition opportunities in the Australian and international medicinal cannabis sector.
Nativ Segev, co-founder and managing director, says the raising is a substantial validation of the enormous potential of medical cannabis.
“These funds will allow us to fast-track the research, development and commercialisation of our own pharmaceutical-grade products which could potentially treat a variety of indications,” he says.
Shares in medical cannabis-related companies have been surging on the ASX.
MMJ Phytotech went from 18 cents to 75 cents a share and Auscann Group from 21 cents to 83 cents.
Stemcell United, which announced it was looking at medical cannabis opportunities, is currently trading at 32 cents, up from a low of 1.3 cents, after briefly hitting $1.