MMJ Phytotech (ASX:MMJ)

smk762

smk762

Active Member
Silver Stacker
Interesting new company starts trading today in the ASX, involved in the supply of medicinal cannabis. Thoughts?

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https://au.news.yahoo.com/thewest/a/26031271/marijuana-firm-set-for-asx-debut/

It has been a very lucrative sector in the US states that have legalised.

Edit: apologies, wrong section. Can admin please move to "stocks and derivatives"?
 
Well well. 110% increase on day one based on IPO price of 0.200.

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I got in at the market open price of 0.320. Ended the day at 0.420.

Still a nice 30% return during the 2 hours it was trading. :D
 
It's not everyday you get a chance to get in on an industry in it's infancy with massive growth potential with new markets set to open regularly over the next few years. This one should jump every time another state or country recognises the therapeutic (and taxation) value of medicinal cannabis.

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THE first medicinal marijuana company to list on the Australian Securities Exchange, Phytotech Medical, has blazed up the board with its shares opening at 32c a giddying 60 per cent over its offer price.

The stock, which debuted today at 2pm (AEDT), is continuing to go higher, with the shares already trading at 37c only 10 minutes after trade began.

The Perth based company, which has a supply of Californian and Uruguayan-grown marijuana, plans to sell its Israeli-made wares in Israel, Europe and North America, as well Australia.

Phytotech Medical raised just under $6m through its initial public offering this month after its $5m was oversubscribed. The float was handled by BBY.

The company has a partnership in place with leading Israeli research institute, Yissum, to develop advanced cannabis-based therapeutics products.

Yissum was founded in 1964 to protect and to commercialise the Hebrew University's intellectual property and products developed by the institute currently generate $US2 billion in annual sales.

"This is a landmark deal for the Australian stockmarket. It is the first medical cannabis company to become listed in Australia, and the demand we've experienced from investors ahead of the listing is clear evidence that the medical cannabis market is set to grow," Phytotech's non-executive chairman Peter Wall said.

http://www.theaustralian.com.au/bus...193353276?nk=cbbdca28d56ac560c8d3e0f3216fd2d8
Click to expand...
2.4 investment highlights
(a) The Company will be fi rst to market (listing on ASX) in Australia, with a strong Board and excellent
management team supported by a world class Scientifi c Medical Advisory Committee.
(b) "Start up" timing is right. The commercial medical cannabis industry is a new and growing
fi eld, although it has been globally known for hundred years.
(c) The Company has developed relationships with key players in the medical cannabis fi eld,
mostly based in Israel. We intend to leverage off these relationships to fast track the
Company's progress with a view to positioning the Company as a leader in the industry.
(d) The medical cannabis market is growing rapidly. 23 US states and the District of Columbia,
permit the use of cannabis for medical purposes under a doctor's direction, and 2 states
have legislation pending for the year. Other countries (Canada, Israel and many Europeans
countries) have either legalised medical cannabis or in advance stages of regulating it.
Many more countries around the world are set to follow.
(e) No one large player (production/distribution) is dominant in the market. The industry
is reasonably fragmented so there are many opportunities for consolidation and scale
advantages through the different market segments.


12.11 financial forecasts
The Directors have considered the matters set out in ASIC Regulatory Guide 170 and believe that
they do not have a reasonable basis to forecast future earnings on the basis that the operations
of the Company are inherently uncertain. Accordingly, any forecast or projection information
would contain such a broad range of potential outcomes and possibilities that it is not possible
to prepare a reliable best estimate forecast or projection.

NOTE 8: HISTORICAL FINANCIAL INFORMATION
PhytoTech is not able to disclose three years historical financial information because the
Company was only incorporated on 14 August 2014. We have therefore included the most recent
statement of profit or loss and other comprehensive income and statement of financial position,
reviewed as at 30 September 2014, as detailed at Appendix 1 and Appendix 2 respectively and
consider that these provide sufficient detail of historical financial information for the Company

The number of patients being prescribed medical cannabis is growing steadily along with the
number of specialists authorised to issue such prescriptions. It is forecasted that in 2020 over
100,000 patients will receive medical cannabis in Israel.
Additionally, in relation to medical devices generally, Israel is only one of few countries in the
world where clinical trials are accepted by the FDA as though conducted in America. The medical
devices industry in Israel is highly developed with many companies listed on the American stock
exchanges or eventually being sold for billions of dollars.

Canada's regulatory environment for cannabis production for medicinal use dramatically changed
on April 1, 2014, opening the way for large-scale grow operations. Licensing requirements are
extensive and there will be considerable competitive advantages to those producers that can
achieve scale.
From April 2014, registered medical cannabis patients must buy their medication from an approved
supplier. "Health Canada" announced in January that it had received 285 applications for commercial
production licenses and approved 7 suppliers.
The market for medicinal use in Canada is estimated at $144 million in 2014 rising to $380 Million
by 2018 and expected to grow by 23% a year to $1.3 Billion in the next 10 years. Official forecasts
predict that the approved list of medicinal patients will grow to 1.2% of the total population over
the next 10 years.

http://static.wpe.au.syrahost.com/v...552-PhytoTech-Medical_Prospectus.pdf?download
Click to expand...

The prospectus puts last P&L at about half a mil in the red, 90% of which was consulting fees preparing and underwriting the IPO. IPO was oversubscribed almost a mil, so that's covered.

Can't say when sales start rolling in, but they've secured a bigger war chest than expected to use on the next phase. Just hope the directors aren't the type to get high on their own supply.
2.15 directors & key personnel

peter wall | non-executive chairman
Mr Wall is a corporate lawyer and has been a Partner at Steinepreis Paganin (a Perth based
corporate law firm) since July 2005. Mr Wall graduated from the University of Western Australia
in 1998 with a Bachelor of Laws and Bachelor of Commerce (Finance). He has also completed a
Masters of Applied Finance and Investment with FINSIA.
Mr Wall has a wide range of experience in all forms of commercial and corporate law, with a
particular focus on equity capital markets and mergers and acquisitions. He also has significant
experience in dealing in cross border transactions. Mr Wall is currently the Chairman of ASX
listed companies, Galicia Energy Corporation Ltd, Minbos Resources Limited and Aziana Limited.
Mr Wall does not expect that his other directorships will impact his ability to act as Chairman of
the Company.

boaz wachtel | managing director
Mr Wachtel has over 25 years experience in the medical cannabis industry. He is a founding
member of 'Israeli foundation for drug law reform" (1994) and initiator of Medical Cannabis efforts
in Israel (1995). Mr. Wachtel is a certified Manager of Clinical trials and earned MA degree from
University of Maryland, USA. Formally he served as the Assistant Army Attach' at the Israeli
Embassy in Washington D.C.
Mr Wachtel was also the founding member of the Medical Cannabis distribution center in Abarbanel
Hospital (2009) and founder and former Chairman The Green Leaf Party: Civil Rights, Ecology,
Harm reduction and Legalization of Cannabis. Since 2006, he has been a Member of the Board
of the Israeli AIDS committee the leading anti-AIDS NGO in Israel. Additionally, Mr Wachtel is a
Lecturer on drug policy, Medical cannabis and Ibogaine.

ross smith | founder & executive director
Mr Smith is the founder of PhytoTech Medical Limited, an entrepreneur and has over 21 years of
experience in company promotion, finance, development and management of various technology
and resource projects.
He has undertaken financing activities in Australia, Canada, United States of America, Hong Kong
and London.
Mr Smith is extensively travelled and maintains an extensive international network within the
investment, stock broking and investment banking community.

winton willesee | non-executive director
Mr Willesee is an experienced company director. Winton brings a broad range of skills and
experience in strategy, company development, corporate governance, company public listings,
merger and acquisition transactions and corporate finance.
Mr Willesee has considerable experience with ASX listed and other companies over a broad range
of industries having been involved with many successful ventures from early stage through to large
capital development projects. Winton has fulfilled the role of chairman and/or director of a number
of listed companies and is currently the Chairman or a director of six other ASX listed companies.
Mr Willesee holds formal qualifications in economics, finance, accounting, education and governance.
He is a Fellow of the Financial Services Institute of Australasia, a Member of the Australian Institute
of Company Directors, a Member of CPA Australia and a Chartered Secretary.
Mr Willesee does not expect that his other directorships will impact his ability to act as a director
of the Company.
Shareholders should be aware that Mr Willesee was a director of public company, Cove Resources
Limited. In July 2014, Cove Resources Limited was suspended
Click to expand...

Cove Resources were a gold exploration mob which didn't pan out when spot slumped mid 2013.

Another upside while the $AUD is low and the laws still being worked out, is that international sales will benefit from the exchange rate, especially US based trade.

Having the Yissum Research Development Company of the Hebrew University involved can't hurt either.
 
This is unbelievable. Am I high?

Saw it touching 0.90 over my morning coffee and I've been smiling like a stoner ever since. Tempted to cash in some but way more buyers lined up than sellers at the moment. Waiting for it to breach $1 and I'll redeem 25% of my stash.
 
That's true. Even if the TGA allows cannabis derived drugs to come to market en mass there are plenty of established businesses overseas that can grow and refine the chemicals to a finished drug product thereby avoiding legal loopholes. Theres a few big businesses in Israel and Britain in this space.

No reason they couldn't be very successful but it is definitely dependant on how successful the liason between the company and the bureaucracy.
 
Heroin derived from opium is illegal, but codeine and morphine are not, and there is no stigma with using the latter for legitimate purposes. Australia seems to have managed to figure out how to regulate and profit from opium, I fail to see why they wouldn't be able to manage to do the same with cannabis.

While a complete repeal of prohibition internationally is not likely in the near future, medicinal use is rapidly becoming acceptable. In the past it was so restricted that scientific studies (unless they supported the prohibition) and medical trials were not allowed. Now that it is being conducted seriously and supporting data is becoming available, pressure on legislators is increasing. There are a few miracle stories out there (Google "Charlotte's web"), and cancer is prevalent enough for even those who oppose to hear about beneficial experiences from people they know and trust. Public perception is changing at a reasonable pace.

All politicians need to do is figure out how to regulate it enough to not lose votes from overly-conservative citizens, how to tax it without appearing to only be in it for the money, and how to allow access to those in need quickly enough not to seem heartless.

IMO the risk of legislative/political factors is not an issue. Those who grew up in the Reefer Madness era are not long for this earth, and increasingly likely to have one of the conditions that it can be used to treat. Those in subsequent generations have generally had enough experience either personally or within social groups to realise that cannabis is not as dangerous as heroin. Politically cannabis was already as demonised as possible, and day by day this is shifting towards acceptance, or at least tolerance. It moves more slowly in some parts than others, but the direction is sideways at worst, pro at best, and I'm not aware of any increase in anti sentiment or legislation in the recent past. Medical use aside, decriminalisation has been enacted or trialed more often than punitive measures have been increased.

You could even go as far as to say that there is a political/legislative reward in the pipeline. The US states who have joined the party are enjoying enough tax revenue to make failing European economies take notice, and law enforcement budgets also benefit, allowing them to focus on the far more destructive scourge of amphetamine use.

There is a certain hypocrisy in allowing cigarettes and alcohol, which contribute to cancer, while denying access to therapeutic cannabis. Politically this disconnect will need to be addressed, and I can't see any politician getting away with banning booze and smokes (taxing them out of existence is another story).

Right now the Telecomunications Industry has a higher exposure to legislative/political risk factors (NBN levy anyone?).

I'll bet 10oz silver that by 2020, cannabis will be an ETF commodity. When that happens, I'll start a forum called StonerStackers where people can discuss the pros and cons of paper vs physical weed.

phrenzy said:
That's true. Even if the TGA allows cannabis derived drugs to come to market en mass there are plenty of established businesses overseas that can grow and refine the chemicals to a finished drug product thereby avoiding legal loopholes. Theres a few big businesses in Israel and Britain in this space.

No reason they couldn't be very successful but it is definitely dependant on how successful the liason between the company and the bureaucracy.
Click to expand...

Phytotech have a relationship with Yissim in Israel who are growing, refining, and permitted to export medicinal grade cannabis. One of their directors has been involved in the medicinal cannabis movement in Israel since 1994.
 
https://au.news.yahoo.com/thewest/a/26174213/smith-resigns-from-pot-firms-board/

Mr Smith is no stranger to controversy. In 2007, he drove a tractor through the front door of the Colonial Brewing pub in Margaret River he co-founded in a dispute with its new owners.
Click to expand...

TBH of all the directors he was the one I had some reservations about, seemed a bit of a strange fella. Just check out the pic at the top of this thread...

Good to have his antics out of the way quickly. They're probably better off without him being a possibility of bringing that kind of bad press, and can now get down to business without him.
 
Yeah I read about the tractor incident. Interesting guy. Been watching closely having missed the boat initially deciding on an entry price. Still unsure though. Been alot of talk in the papers about medical marijuana so things are looking positive.
 
Kinda regret not cashing in a quarter when it was 80+, but at the mo I'm looking for a sign to double down. This could be it?
 
Well didn't expect it to freefall the way it has. Dipped down to $0.33 briefly and currently $0.35. Two days of sharp drops have me a little spooked. Or is it the perfect time to get in? Still can't help but feel there might be a bit more to fall though..
 
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