Net Tangible Asset Backing
1. Portfolio valuation
MMJ is required to announce its net tangible assets ("NTA") per share pursuant to Listing Rule 4.12 following its readmission as a listed investment company ("LIC") in November 2018.
MMJ announces that its unaudited NTA per share as at 28 February 2019 was 33.88 cents (pre-tax) and 30.95 cents (post-tax)(see Note 1 below).
Subsequently MMJ's post-tax NTA per share increased a further 9% to approximately 34 cents per share as at 13 March 2019 which represents a 47% premium to MMJ's current share price of 23 cents(see Note 2 below).
Since relisting as a LIC in November 2018, MMJ's NTA has increased 59% in the period to 13 March 2019 reflecting the improved performance of its portfolio which is primarily located in Canada. We continue to see a positive outlook for MMJ's investment portfolio with continued recovery in the price of Harvest One Cannabis Inc. (HVT), the rollout of HVT's business strategy and further business development announcements across MMJ's portfolio in the coming months.
MMJ has taken advantage of the share price growth of Medipharm LABS Inc. (CVE:LABS) by selling down part of its investment in LABS to provide liquidity for future investments. MMJ retains a substantial investment in LABS with 3.2 shares and 2.94m warrants with book value of AUD17m.
MMJ's portfolio summary is included in Appendix One (see link below).
MMJ has a cash balance of $4m and more than 70% of the portfolio currently held in listed investments.
As announced on 22 February 2019, the Board does not consider an equity raising to be in the best interests of shareholders. However, should the situation improve in the near term, MMJ will be retaining the flexibility to proceed with a Share Purchase Plan (SPP) offering following approval of the SPP by MMJ shareholders on 22 February 2019.
In light of the above, MMJ is assessing the timing of the implementation to allow the SPP and other capital raising options to be implemented when the NTA is better reflected in MMJ's share price.
2. Listing of Bevcanna on TSXV
MMJ is pleased to advise that BevCanna Enterprises Inc. (BevCanna) expects to list on the TSX Venture Exchange ("TSX-V") during the first half of calendar 2019.
Based in Vancouver, Canada, BevCanna is a fully vertically-integrated premium-based cannabis infused beverage manufacturer. Specifically, BevCanna aims to operate as a white label, end-to-end producer of CBD and THC beverages.
MMJ owns 2.5m shares in BevCanna with current book value AUD1.3m.
The listing of Bevcanna will be the fourth of MMJ's investee companies to proceed to public listing.
3. Fire & Flower marketing agreement with Lift & Co.
On 6 March 2019 Fire & Flower Holdings Corp. ("Fire & Flower" or the "Company") (CVE:FAF), an independent licensed cannabis retailer, announced an agreement with Lift & Co. (CVE:LIFT), an independent emerging leader in cannabis marketing, data and insights, and a forum for cannabis consumers to share product reviews and experiences.
This agreement, which takes effect April 1, 2019, brings together Fire & Flower's education-focused retail expertise with Lift & Co.'s database of product reviews and partner benefits. Fire & Flower has engaged Lift & Co. for a series of initiatives, including listing Fire & Flower as a premium retailer on the Lift & Co. platform in Alberta, Saskatchewan and Ontario. Lift & Co. members will be able to share their Fire & Flower cannabis experiences in both product and business reviews, which earn Lift Points that may be redeemed within the Lift & Co. platform for gift cards, exclusive promotions and invite-only industry events.
Fire & Flower listed on the TSXV in February 2019 and is a leading independent adult-use cannabis seeking to capture significant market share in Canadian provinces that allow private retail.
MMJ owns 1.25m shares and 1.25m warrants in FAF with current book value AUD2.9m.
1 The post NTA reflects Australian corporate tax rate of 30% on unrealised gains in investment portfolio
2 Share price as at 13 March 2019
To view tables and Appendix, please visit:
About MMJ Group Holdings Ltd
MMJ Group Holdings Ltd (ASX:MMJ) is a global cannabis investment company. MMJ owns a portfolio of minority investments and aims to invest across the full range of emerging cannabis-related sectors including healthcare, technology, infrastructure, logistics, processing, cultivation, equipment and retail. For MMJ's latest investor presentation and news, please visit: http://www.mmjphytotech.com.au/investors/
MMJ Group Holdings Ltd
MediPharm Labs Corp.
Lift & Co Corp
Fire & Flower Inc.