MMJ Group Holdings – A Worldwide Investment Vehicle for the Future of Cannabis
After a pivotal 2020, cannabis legal sales across the U.S. hit record-breaking numbers of $17.5 billion in adult-use and medical cannabis. Additionally, increased talks about extending legalization frameworks in emerging markets worldwide have made investing in the future of cannabis promising.
MMJ Group Holdings Ltd. (ASX: MMJ) (OTCMKTS: MMJJF), formerly MMJ PhytoTech Limited, is an Australian-listed company whose core business is holding minority investments along the cannabis value chain in Australia, Canada and Europe.
The company’s portfolio management focuses on creating a diversified portfolio of CBD and cannabis investments in cultivation, extraction and consumer products with material investments in Weed Me Inc. (OTCPK: WDDMF), Entourage Health Corp (TSX-V ENTG) (Formerly known as WeedMD) , Sequoya Cannabis Ltd., Harvest One Cannabis Inc. (OTCQB: HRVOF) and Southern Cannabis Holdings.
In addition, MMJ is also able to make investments in sectors outside of cannabis, such as but not limited to, natural resources, pharmaceuticals and software services technology.
Harvest One Cannabis
Harvest One is a licensed cannabis producer based in British Columbia, Canada. The company boasts a great case for its Discover Series given its smaller profile among investors and ambitious expansion schedules.
The company currently operates a small licensed production facility, mainly through its two subsidiaries, United Greeneries and Satipharm. Both assets were acquired from MMJ PhytoTech (OTCPK: MMJJF) in April 2017. It also acquired Dream Water, a branded product of liquid sleep shots.
Harvest One has also established a footprint in select international markets that could provide additional option value when these markets mature.
The company announced its unaudited financial results for Q1 and 9 months ended March 2021. Here are a few highlights:
The company’s revenue is CA$2.02 million from continuing operations during the current quarter compared to CA$1.88 million during the same period in 2020.
The product mix continues to transition from cultivation to consumer packaged goods (CPG) products.
from continuing operations, during the current quarter, the company reported 37% gross profit compared to 24% during the same period in 2020.
On March 17, 2021, HVT closed an oversubscribed CA$5.75 bought-deal public offering at a price of $0.155 per unit.
Southern Cannabis Holdings
Southern Cannabis Holdings builds, integrates and operates high-value brands across the cannabis value chain. The holding is formed by Freshleaf Analytics, a source of big data and custom analytics for the medicinal cannabis industry; Cannabis Access Clinics, an Australian network of medicinal cannabis clinics and Applied Cannabis Research, Australia’s first contract research organization focused exclusively on medicinal cannabis treatment.
Corporate Highlights
MMJ has a myriad of possibilities for those looking into the general international cannabis market. The company has a mixture of private and publicly listed companies across the emerging Australian and offshore cannabis and hemp markets, priming the company for dominant standing as a major investment company.
In the company’s latest investment portfolio report, MMJ’s net asset value (before provision for tax) declined 5% in the year ended June 2021 compared to its benchmark index of positive 61%.
The MMJ portfolio during the year was heavily weighted to unlisted investments, and on June 30, 2021, listed assets represented only 27% of MMJ. A number of the unlisted companies deferred their IPO intentions during the year ended June 2021.
This significant unlisted bias in the portfolio impacted both the performance relative to the benchmark index and the significant discount of share price to NAV, which stood at 56% at year-end. Additionally, the benchmark index (only listed assets) was favorably impacted by IPO and merger activity during the year.
MMJ’s Funding Position
MMJ is well-positioned to create value from its existing portfolio with a liquid balance sheet and cash flow from investments:
Total assets of $44 million with immaterial current liabilities
Cash of AU$3.4 million, a company tax refund receivable of $4.6 million and a portfolio of listed equities (CA$6 million), listed convertible loans (CA$4 million) and unlisted loan securities (CA$3 million), which provide interest income with flexibility to fund flow on investments, effect timing of investment exits and MMJ’s operating requirements
To learn more, visit the company’s website.
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