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MMJ Group invests in Canadian manufacturer of vape pens and cartridges

Aiming to capitalise on the pending legalisation by the Canadian Federal Government of concentrates and vaporisers in October 2019.

Flyte vape pen
Flyte vape pen

MMJ Group Holdings Ltd (ASX:MMJ) has invested C$2.5 million for a 7.3% shareholding in Volero Brands Inc, a private company based in Canada which owns and manufactures the Flyte brand of vape pens and cartridges.

Volero is building a state-of-the-art extraction and production facility that will produce vaporisers, concentrates and topical solutions.

The facility is expected to be completed in Q3 2019 and will be designed to generate a revenue of more than C$100 million per annum.

MMJ’s C$2.5 million investment is part of Volero’s C$5 million seed funding round.

The investment consists of 5 million shares and 2.5 million warrants exercisable at C$0.65 within three years.

Volero is aiming to capitalise on the pending legalisation by the Canadian Federal Government of concentrates and vaporisers in October 2019.

In this event, Flyte could become a major player in that market having already established a brand and an attractive price point.

MMJ chairman Peter Wall said: “Volero provides the opportunity for MMJ to invest in the potentially lucrative segment of concentrates and vaporisers which are expected to be legalised in October 2019.

“The investment again demonstrates MMJ’s capacity to secure investments in private cannabis businesses which are on a short path to public listing.”

Bonus opportunity: USA

MMJ was introduced to Volero by Embark Ventures Inc which is MMJ’s proposed manager of its investment portfolio.

Through Embark Ventures, MMJ’s was able to secure significantly superior terms to those originally proposed.

Wall added: “We are delighted that we could work together with Embark Ventures to find a structure that works for both groups on the first investment originated for MMJ”.

Following settlement of the Volero investment which is expected before May 31 2019, MMJ will have cash reserves of $26 million.

Quick facts: MMJ Group Holdings Ltd

Price: 0.22 AUD

ASX:MMJ
Market: ASX
Market Cap: $50.63 m
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