Embark Health Announces the Commencement of Revenue Generating Operations

MMJ Group Holdings Limited (ASX:MMJ/OTC Code MMJJF) (“MMJ”), an Australian-listed company that specialises in managing a portfolio of investments along the cannabis value-chain, is pleased to provide an update on the operations of MMJ’s largest investee, unlisted Embark Health Inc (“Embark Health”).

In the attached release, Embark Health updated its shareholders on the commissioning of its production facility in Delta, BC. where the production of bubble hash, rosin and dry sift has commenced. This announcement followed commencement of production of cannabis extracts at their Delta, BC facility subsequent to receipt of all occupancy and business licences required from the city of Delta, BC in April 2020.

Initially, Embark Health is producing Bubble Hash, Dry Sift and Rosin for commercial sale in addition to providing tolling services to a wide range of customers. Other extraction technologies will be added as more rooms in the facility are licensed. Embark Health is seeking to create the largest cannabis (THC and CBD) extraction business in Canada with facilities in British Columbia (BC) and Ontario (ON).

MMJ was a foundation investor in Embark Health in July 2018 which now comprises:

1. 3.425m ordinary shares (approximately 12.7% shareholding) in Embark Health with a book value of CAD2.40 per share.
2. Warrants that provide the option for MMJ to acquire a further 1.0m shares at CAD1.75 each up with maturity date of two years after a Liquidity Event¹.
3. Warrants that provide the option for MMJ to acquire a further 1.2m shares at CAD1.20² each up with maturity date of two years after a Liquidity Event.
4. Warrants that provide the option for MMJ to acquire a further 1.125m shares at CAD4.80 each up with maturity date of two years after a Liquidity Event.
5. MMJ had generated a total return of 2 times³ on its investment with a current book value of $13.2m.

MMJ’s investment in Embark Health demonstrates MMJ’s capacity to originate early stage unlisted investments in the cannabis sector with the prospect of realising potential gains on listing the public markets.

Further detail on the operations of Embark Health may be found on the MMJ website. 

Read the full ASX Release here.

¹ A Liquidity event is an initial public offering or a material sale event

² Exercise price has based on MMJ book value of CAD2.40 per share

³ As at 30 April 2020