Kanabo raises funds as it snaps up stake in medical cannabis cultivator
Kanabo Group PLC (LON:KNB) said it has raised £1mln in a share placing while also unveiling an investment in pre-IPO medical cannabis cultivator Hellenic Dynamics SA.
The developer of cannabis-derived products said it raised the funds through the placing of around 4.5mln shares at a price of 22p each, a 10% premium to its closing price last Friday, from new and existing investors.
Meanwhile, the firm said it has purchased £750,000 worth of shares in Hellenic as part of a wider strategic partnership between the two companies.
Under the terms of a memorandum of understanding (MoU), Kanabo said it is envisaged that it will purchase up to 1000 kilograms per year of EU GMP certified cannabis flowers from Hellenic with pre-defined THC or CBD contents for subsequent extraction of medical standard oils.
Kanabo will receive its shares as part of Hellenic’s initial public offering (IPO) on the London Stock Exchange through a reverse takeover of an AIM-listed cash shell, adding that the prospective takeover is “well advanced” and further announcements are expected shortly.
“This agreement and investment in the business underscores the quality and scale of our specialist cultivation ambitions. We look forward to working closely with Kanabo and this deal highlights the demand and growth opportunity for Hellenic Dynamics in the European medical cannabis market”, Hellenic’s vice president Davinder Rai said in a statement.
“The MoU with Hellenic Dynamics and the subsequent investment is part of Kanabo’s strategy to quickly grow its core business whilst pursuing complementary, synergistic, acquisitions and investments in the medical cannabis space, leveraging our position as a quoted company. We welcome the enthusiastic support of investors for our approach”, added Kanabo chief executive Avihu Tamir.