LGC Capital Ltd.
Symbol: TSX-V: LG
- LGC to increase its strategic interest in Australian Medical
Cannabis company Little Green Pharma to 14.99% by issuing 5,000,000
LGC shares.
- Australian Government to allow the export of medicinal cannabis
exports.
MONTREAL, Jan. 22, 2018 /CNW Telbec/ - LGC Capital
Ltd. (TSXV: LG) ("LGC") is pleased to announce
that it has entered into a Binding Term Sheet with licenced
Australian Medical Cannabis company Habi Pharma Pty Ltd of
Perth, Australia, doing business
as Little Green Pharma ("Little Green Pharma"), to increase
LGC's strategic interest in Little Green Pharma from 11.91% to
14.99%.
The proposed increase to 14.99% will take LGC's interest in
Little Green Pharma to just below the 15% threshold requiring
approval from the Australian Foreign Investment Review Board.
Increasing LGC's interest in Little Green Pharma has been a top
priority for LGC over the past few months, and even more so since
the Australian Government announced on January 4, 2018 an
important step for the development of the Australian medical
cannabis sector by permitting the export of medicinal cannabis
products from Australia.
The full statement from the Hon. Greg Hunt MP, Australian
Minister for Health, is set out below and is also available at:
http://www.health.gov.au/internet/ministers/publishing.nsf/Content/health-mediarel-yr2018-hunt003.htm
"Australian Government to allow medicinal cannabis exports
(4 January 2018)
In an important step for the development of the medicinal
cannabis sector and to secure long-term supplies for Australian
patients, the Federal Government will permit the export of
medicinal cannabis products.
This follows extensive consultation that was undertaken last
year.
Our top priority is to ensure a safe quality supply of
medicinal cannabis for Australian patients.
This decision will help both the domestic supply and
Australian producers by strengthening the opportunities for
domestic manufacturers.
The Turnbull Government is committed to ensuring a safe,
quality supply of medicinal cannabis is available to Australian
patients under proper medical supervision.
In an additional move to support both patients and
manufacturers, the Turnbull Government will now permit the export
of Australian manufactured medicinal cannabis products.
We are making these changes because the expanding domestic
medicinal cannabis products industry is facing increasing
competition from imports.
And allowing the export of medicinal cannabis products will
help the developing domestic market to grow further.
We believe it is appropriate to amend the regulations
governing the export of cannabis products to provide a level
playing field.
But this change will not come at the expense of Australian
patients.
In fact, by helping the domestic manufacturers to expand,
this in turn helps to ensure an ongoing supply of medicinal
cannabis products here in Australia.
It will be a condition of any licence authorising export that
medicinal cannabis products be made available, when and if
required, to Australian patients first.
Exports were not initially allowed in the scheme because
Australia was focussed on gaining
the confidence of the international community in its cultivation
system and other controls.
I'm pleased that the International Narcotics Control Board
reported favourably on Australia's
framework in its 2016 Annual Report.
We are continuing to make it easier for doctors to access
medicinal cannabis products more rapidly, while maintaining strict
safeguards for individual and community safety.
We want a robust Australian medicinal cannabis industry so
that doctors have safe, quality domestic products that they can
confidently prescribe to their patients.
Doctors can apply under the Therapeutic Goods
Administration's Special Access Scheme Category or via an
Authorised Prescriber to legally prescribe medicinal cannabis
products."
John McMullen, CEO of LGC
commented, "The recent changes in Australian Government policy to
allow companies like Little Green Pharma to export medical cannabis
outside of Australia significantly
changes the importance of this investment within the LGC global
footprint portfolio. We have worked diligently through the
highly-regulated Australian environment for the cannabis sector and
have gained approval from the Australian Government's Office of
Drug Control to allow LGC to increase our shareholding above 5%. We
are also looking forward to Little Green Pharma producing its first
medical cannabis products for commercial sale over the next few
months. We are also working closely with Little Green Pharma to
provide access to other investee companies within LGC's portfolio
to cross-pollinate growing, facilities, processing and marketing
ideas to broaden Little Green Pharma's reach into potential
international markets."
Fleta Solomon, Little Green
Pharma's Managing Director commented; "We are thrilled that LGC has
decided to increase its investment in Little Green Pharma to 14.99%
and strengthen its position as a key cornerstone investor. With the
Federal Health Minister recently announcing Australia's potential to be the world's number
one medicinal cannabis supplier, LGC can strategically assist
Little Green Pharma in its export and growth
opportunities."
The new Binding Term Sheet will increase LGC's strategic
shareholding in Little Green Pharma to an aggregate of 9,783,495
shares, representing a 14.99% interest. To that end, Little Green
Pharma will issue 2,283,495 additional shares to LGC at a deemed
issue price of AUD $1.16398 per share for a total
consideration of approximately AUD $2,657,950. LGC will pay
for the shares by issuing 5,000,000 LGC shares to Little Green
Pharma at a deemed issue price of CAD $0.53 per share,
representing the closing price of LGC's shares on the TSX Venture
Exchange on Friday, January 19, 2018, for a total
consideration of CAD $2,650,000, equivalent to
AUD $2,657,950 based on the Bank of Canada exchange rate on January 19,
2018.
The Binding Term Sheet also contains an undertaking by LGC to
participate in Little Green Pharma's next capital raise, by
June 30, 2018, to the extent required to maintain LGC's 14.99%
shareholding in Little Green Pharma.
Closing of the transaction with Little Green Pharma is subject
to the parties entering into a definitive subscription agreement
and to standard closing conditions. The transaction is also subject
to regulatory approval, including that of the TSX Venture
Exchange.
Note: On January 19, 2017, the
Bank of Canada's daily average
exchange rate for the Australian dollar was AUD $1.00 = CAD $0.9970.
About Little Green Pharma (www.lgpharma.com.au)
Little Green Pharma is a private entity in Australia and is one of the few companies in
Australia to be granted a licence
to cultivate and produce Medical Cannabis within Australia. On December 14, 2017, Little
Green Pharma announced that its first crop of medicinal cannabis
was being cultivated in Western
Australia at its secure growing facility south of
Perth. That event marks the first
time medicinal cannabis has been cultivated locally in Western Australia. Little Green Pharma aims to
have first product available for patients within the first few
months of 2018.
About LGC (http://www.lgc-capital.com)
LGC Capital Ltd. is a Canadian incorporated public company
listed on the TSX Venture Exchange (TSXV: LG). LGC's objective is
to become a diversified business group with core business divisions
that provide shareholders with exposure to a diverse range of
businesses, products and services.
Information Relating to Little Green Pharma
All information contained in this press release relating to
Little Green Pharma has been provided to LGC by Little Green
Pharma. LGC has relied upon this information without having made
independent inquiries as to its accuracy or completeness and
assumes no responsibility for any inaccuracy or incompleteness of
such information.
FORWARD-LOOKING STATEMENTS
This press release may
contain forward-looking statements with respect to LGC Capital Ltd.
("LGC") and Habi Pharma Pty Ltd ("Habi Pharma"), and their
respective operations, strategy, investments, financial performance
and condition. These statements generally can be identified by use
of forward- looking words such as "may", "will", "expect",
"estimate", "anticipate", "intends", "believe" or "continue" or the
negative thereof or similar variations. The actual results and
performance of LGC and Habi Phama could differ materially from
those expressed or implied by such statements. Such statements are
qualified in their entirety by the inherent risks and uncertainties
surrounding future expectations. Some important factors that could
cause actual results to differ materially from expectations
include, among other things, general economic and market factors,
competition, government regulation and the factors described under
"Risk Factors and Risk Management" in LGC's Management's Discussion
and Analysis for the fiscal year ended September 30, 2016, as filed on SEDAR
(www.sedar.com). The cautionary statements qualify all
forward-looking statements attributable to LGC and persons acting
on its behalf. Unless otherwise stated, all forward-looking
statements speak only as of the date of this press release and
neither LGC nor Habi Pharma has any obligation to update such
statements, except to the extent required by applicable securities
laws.
Caution Regarding Press Releases
Neither the TSX
Venture Exchange nor its Regulation Service Provider (as that term
is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this
release.
SOURCE LGC Capital Ltd