MGC Pharmaceuticals has bought a Czech-based company so it can develop new strains of medicinal cannabis and increase production.
A short time ago, its shares were up more than 7% to $0.06.
MGC, which plans to grow medical cannabis in Australia, is buying up to 80% of Panax by providing Euros 700,000 ($A1.03 million) for operating costs and by issuing up to Euros 800,000 ($A1.18 million) in shares.
“Our acquisition of Panax significantly strengthens MGC Pharma’s medical cannabis research and production capabilities,” says Nativ Segev, co-founder and managing director of MGC Pharma.
“Not only does it build on our outdoor Slovenian growing facility and production capacity, it also allows the company to produce high intensity medical grade cannabis products for our clinical trials and research programs planned for Israel, Europe and eventually in Australia.”
Panax, which uses the Vukoz institute established in 2007 by the Czech Ministry of the Environment, holds a medical cannabis breeding license agreement.
The deal will enable MGC Pharma to produce in Europe a large variety medical grade cannabis products and materials under license agreements held by Panax.
MGC Pharma completed a backdoor listing on the ASX in February with a reverse takeover of Erin Resources.
ASX-listed Medlab Clinical became the first commercial business involved in therapeutic cannabis research last year after being selected by the NSW Government to conduct the research at its Sydney laboratory.