SYDNEY: MGC Pharmaceuticals Ltd announced completion of the 100% acquisition of the operating telehealth clinic business assets, data and intellectual property of Medicinal Cannabis Clinics (MCC), which was a wholly owned subsidiary of Cannvalate Pty Ltd.
The completion of the Medicinal Cannabis Clinics (MCC) acquisition follows the signing of the binding term sheet in July 2020 and execution of transaction documents. The payment of the consideration of $1 million MGC Pharma Ordinary Shares (2/3 subject to trading restrictions) and $400,000 in cash is to be made in coming days.
Medicinal Cannabis Clinic Pty Ltd (now 100% owned by MGC Pharma) is also in the process of obtaining all relevant state and federal licences to allow for the import and distribution of MGC Pharma medicinal cannabis products in Australia.
The Company will then move its Australian supply chain in to Medicinal Cannabis Clinic Pty Ltd which will significantly reduce logistical costs such as importation, storage and distribution costs per unit, delivering an increased profit margin.
For the first two (2) years, the clinic will continue to be managed by Cannvalate and Dr Gal Wong, ensuring clinical governance practice is maintained.
Medicinal Cannabis Clinics (MCC) was established in 2019 and is now a leading Australian telehealth medicinal cannabis clinic with an extensive doctor and patient network, that enables eligible patients to access high-quality and affordable medicinal cannabis products.
Since incorporation, MCC has facilitated over 4,000 medical consultations with pre-screened eligible patients and has shown continued month-on-month growth. The clinic utilises video telemedicine, allowing its doctors to prescribe the range of cannabinoid medications available in Australia.
This transaction provides MGC Pharma with turnkey access to over 600 pharmacy accounts and patients can also leverage on existing seamless delivery infrastructure so medication can be dispensed and delivered straight to the patient’s door, eliminating the need for multiple visits to both doctor and pharmacy.
MCC Assets acquired provide MGC Pharma with an operating platform with import and distribution capacity that will significantly expand market access and provide control of the supply chain from manufacturing through to patients. This allows the Company to continue providing its high-quality GMP certified medications to patients in Australia to further improve the profit margin at the current affordable prices.
The acquisition of the MCC Assets is the next step in building on-the-ground distribution assets. This allows the Company to wholesale and distribute directly to other clinics and pharmacies to reduce storage and distribution costs, while giving the ability to set retail price points.
Roby Zomer, Co-founder and Managing Director of MGC Pharma, commented: “We are very pleased to complete the acquisition of MCC. As previously announced, this acquisition significantly improves our distribution network and supply chain capabilities and efficiencies both in Australia and Internationally. The MCC acquisition enables MGC Pharma to increase the profit margin and meet our stated goal of providing high-quality cannabinoid medications to patients at an affordable price”.