MMJ Group increases investment in Embark Health, valuation nearly triples

MMJ Group Holdings Ltd’s (ASX:MMJ) has agreed to invest an additional CAD$3.6 million in the unlisted company Embark Health Inc.

The investment was part of a C$10 million capital raising conducted by Embark to fund the build-out of their three extraction facilities in Delta, BC, Woodstock, Ontario, and Phillipsburg, Kansas.

When the production facilities are operational, Embark Health will be a significant cannabis extraction producer servicing the Canadian and global medical and recreational markets.

Valuation increases to nearly triple book value

The latest raising values MMJ’s near-12% holding in the company at A$9.8 million, which is nearly triple its book value of A$3.3 million.

MMJ’s chairman Peter Wall said: “This is another example of MMJ’s strong market and financial discipline identifying opportunities and bottlenecks in the cannabis value-chain in markets and acting quickly.”

“Embark Health has executed its business plan and is well-positioned to become one of the largest cannabis extraction business in North America within twelve months.

“The investment demonstrates MMJ’s expertise to secure a private negotiated investment in listed and unlisted cannabis businesses which are not generally available to Australian retail and institutional investors.”

NTA per share of 30 cents at end of September

MMJ’s portfolio of investments ended the recent September quarter with a total value of $74 million for a net tangible asset (NTA) per share valuation of 30.1 cents.

With shares last priced at 23 cents, this represents over a 20% discount to NTA.

Article source: Proactive Investors