UK medicinal cannabis investment vehicle Sativa Investments PLC (LON:SATI) said it has raised £3.75mln in a share placing and signed heads of terms for a £85,000 option to lease a 7.53 acre development site in Wiltshire.
The company said it placed 62.5mln new ordinary shares at 6p each and the proceeds of the equity raise would be used to “further Sativa’s progress and development as the UK’s first medicinal cannabis investment vehicle”.
Sativa expects the option agreement on the Wiltshire site to be signed today after which it plans to construct a glasshouse on up to 6.86 acres. The site will be used to grow cannabis plants for the production of medicinal cannabis and cannabidiol (CBD) products. An extraction facility and offices will also be built on the site.
The group has been granted planning permission to build the glasshouse. It will enter into a 25-year term lease for the site and will be able to extend this for a further three months for a £15,000 payment under an option that can be exercised at any time up to July 2019.
Sativa on track to become UK's first seed to consumer medicinal cannabis business
The move is part of the company’s plans to become the UK’s first seed to consumer medicinal cannabis business. Sativa already has a cannabis-testing laboratory in the UK, called PhytoVista Laboratories, and its subsidiary George Botanicals has a UK hemp growers' licence.
Sativa said the cost of the 7.53-acre site, including the construction of the glasshouse, an extraction facility and offices, is estimated to be £10.5mln.
Sativa to offer products at 'highly competitive rates'
The glasshouse will sit beside an existing 3.6MW capacity bio-digester plant from which the company will be able to purchase electricity at significantly below market rates. This will make it the first green-powered medicinal cannabis canopy in the UK.
“The directors believe that this in turn will enable Sativa to offer products to the market at highly competitive rates,” the company said.
The company said about 194,224 sq ft or 65% of the 298,806 sq ft glasshouse will be harvested while the rest will be used for ancillary space including walkways and seedlings.
Industry figures show that each square foot of canopy produces 40 grams of raw cannabis, which had an average wholesale gross revenue of £4.00 per gram in the last year.
Canadian-based Veritas Pharma Inc. is advising Sativa on cannabis strain selection.
As part of the consideration for the option, Sativa will offer owners of the farm an option to acquire 2 million ordinary shares in the company at a price of 5 pence per share after the development is completed and operational.
The announcement comes after the UK government said doctors will be able to prescribe medicinal cannabis from November 1.
People suffering from chronic pain, epilepsy, or nausea as a result of chemotherapy or multiple sclerosis (MS) will be among the first to be prescribed the drugs.