FSD Pharma (CSE:HUGE, NASDAQ:HUGE) Inc announced that it has closed the sale of its former cannabis processing facility in Cobourg, Ontario, Canada for gross proceeds of $16.4 million in cash.
The facility became non-essential to FSD Pharma after it decided in early 2020 to exit the cannabis production market to focus on the biotech market, advancing novel drug candidates targeting lucrative areas of unmet medical needs like Muscular Sclerosis, Depression Disorders, and Inflammatory Disorders.
"This is a major accomplishment and puts us in a good position going forward especially considering the current state of the capital markets. While most companies have taken huge write-downs on dispositions of cannabis-related assets, we were able to net significant profit from selling the facility," Anthony Durkacz, interim CEO and co-executive chairman of FSD Pharma said in a statement.
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The sale, completed on May 6, 2022, included a 26.1-hectacre parcel of land and 50,800 square-meter building, which the company bought in 2017 for $5.5 million. Net of commissions and fees, the sale raised around $15.48 million, which has been added to the company's balance sheet.
"Combined with our existing cash on hand, we are sufficiently capitalized for operations through 2025, inclusive of budget allocations for planned clinical trials and without having to look to the capital markets for any additional funds. Our cash position now exceeds our market capitalization, as we continue to work toward building value for our shareholders," added Durkacz.
FSD Pharma is a Toronto-based biotechnology company with three drug candidates in different stages of development.
Contact the author at jon.hopkins@proactiveinvestors.com