SEED Innovations Ltd (AIM:SEED, OTC:FFRIF) said its portfolio company Little Green Pharma Ltd (ASX:LGP) is to demerge its psychedelics business this year.
Little Green will demerge via in-specie distribution and entitlement offer to shareholders that will result in the Australian LGP’s psychedelics business turning into a separate unlisted entity, Reset Mind Sciences Ltd.
Following the demerger, eligible shareholders will hold separate shareholdings in LGP and Reset, which SEED Innovations argues will allow differentiation for LGPs investors in the medicincal cannabis and psychedelics markets.
SEED Innovations, which holds 3.1% of LGP’s issued share capital and invests in high growth businesses with a focus on medical cannabis, health and wellness, last week said it was pleased with LGPs progress as the company reported revenue of A$3.7mln.
The decision to invest more deliberately in psychedelic treatments comes off a growing body of research on the ability of these medicines, including psilocybin and MDMA, to treat various chronic mental health conditions.
Fleta Solomon, chief executive officer at LGP, said: “We have invested significant effort investigating and advancing Reset's psychedelics operations throughout 2021 and believe it is now at a point where it is best placed to grow as a standalone business.
“We are confident the demerger will allow for both Reset to drive its psychedelics strategy and LGP to focus solely on its medicinal cannabis business.”