Cannabis Australia: Australian company MGC Pharmaceuticals to produce large-sale medical marijuana products trough Panax licence

MGC Pharmaceuticals (ASX-listed) shares have jumped as it revealed its plans on high-intensity cannabis. The company has bought a Czech-based company to develop new medicinal cannabis strains and increase production. After MGC Pharma revealed its plans to develop medicinal cannabis strains, its shares jumped by more than seven percent to $0.06.

According to the Nativ Segev, the co-founder and managing director of MGC Pharmaceuticals, acquisition of the Czech-based company Panax will further strengthen MGC’s capabilities on medical marijuana research and production.

“Not only does it build on our outdoor Slovenian growing facility and production capacity, it also allows the company to produce high intensity medical grade cannabis products for our clinical trials and research programs planned for Israel, Europe and eventually in Australia,” said Segev in a press release.

As MGC Pharmaceuticals is planning to grow medicinal cannabis in Australia on a large scale, it has paid 700,000 euros (AU$1.03 million) in operating costs and 800,000 euros (AU$1.18 million) in shares to acquire 80 percent of Panax.

In 2007, when Czech Ministry of the Environment establishes Vukoz institute, Panax started using it as it had a medical cannabis licence to grow marijuana. What this deal means for MGC Pharma is that it will be able to produce large varieties of medicinal cannabis products and materials, such as cannabis oil, under the licence agreements held by Panax.

In February 2016, MGC Pharmaceuticals completed a backdoor listing on the ASX with a reverse takeover of Erin Resources. However, the company that became the first commercial business to engage in therapeutic cannabis research last year was ASX-listed Medlab Clinical. The NSW government selected the company to carry out research at its Sydney laboratory.

Under the Panax licences, MGC Pharma will be able to research, grow, import and export medical marijuana from the Czech Republic. Currently, MGC only sells non-psychoactive cannabidiol to medical and cosmetic markets in Europe.

With this move, MGC will gain access to highly advanced laboratories that can up cannabidiol production by leaps and bounds. MGC says that cannabidiol is helpful in treating conditions such as dry skin, eczema, acne and psoriasis.