Canadian marijuana stock LGC Capital Ltd.’s (TSXV:LG) Jamaican investment received its Tier-3 growing license
SmallCapPower | June 25, 2018: LGC Capital Ltd. (TSXV:LG), a Canadian marijuana stock focused on investing in early-stage cannabis producers in legal jurisdictions globally, provided an update Thursday on its proposed Jamaican investment in Global Canna Labs Ltd (GCL). LGC Capital announced that GCL received Tier-3 growing license from the Jamaican Cannabis Licensing Agency for its 270,000 sq ft facility within its 6.23 acres site in Montego Bay, Jamaica. Cultivation at the facility is expected to commence immediately with 8,000 seedlings in first cycle and first harvest expected in 12 weeks. GCL is also commencing the expansion of its current growing facility in Montego Bay and is in late stage talks for the acquisition of an additional 300 acres of land in Jamaica.
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LGC Capital also announced that it has received conditional approval from the TSXV for its previously announced transaction with GCL, wherein LGC will acquire a 30% interest in GCL by subscribing to a $2.5 million secured debenture and will acquire a 5% royalty on GCL’s net sales for $2.0 million payable in LGC shares. The addition of GCL to LGC’s portfolio investments significantly expands LGC’s capacity and coupled with its completed investments in Tricho-Med (Canada) and Little Green Pharma (Australia) would rank it among the top Canadian cannabis producers by 2020. GCL is one of the largest cultivators of medical cannabis in Jamaica, with target production expected to cross 15,000 kg in 2019, 40,000 Kg by 2020 and to more than 60,000 kg annually by 2021.
LGC Capital John McMullen stated, “LGC Capital is pleased to be partnering with one of the only approved Tier-3 medical cannabis producers in Jamaica. Tier-3 is specifically granted for large-scale producers of over 5 acres in size. This is a very big milestone for LGC and Global Canna Labs. Global Canna Labs has proven it has the expertise to become a major force not only in Jamaica but in the global marketplace as well. I look forward to the rapid growth of the company and LGC will continue to support Global Canna Labs’ efforts to supply a wide portfolio of organic medical cannabis products for both the domestic and global consumer.”
Following the announcements, shares of LGC Capital surged 48% to close at $0.185 on the TSXV. Despite the up move, the stock is a microcap within the cannabis space with a market cap of a $66.2 million compared to large cannabis producers that trade in excess of $1.0 billion in market cap. With production commencing immediately at its Jamaican investment along with potential for significant ramp up in capacity, placing it among the cannabis majors, the stock could see significant price appreciation over the coming weeks and months.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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