Mining billionaire Gina Rinehart has announced plans to invest millions into Perth-based medical cannabis company Little Green Pharma (ASX:LGP).
Little Green Pharma was one of Perth’s first medical cannabis companies. For the past few years, the company has produced cannabis oils and cannabis flower from its South West Perth facility. Recently, the company has expanded into Canada, Germany, and New Zealand.
Rinehart is investing in this expansion through her company Hancock Prospecting. Hancock Prospective will invest a total of $15 million into Little Green Pharma through a share acquisition. Rinehart will reportedly pay 60 cents per share and hold just over 10% stake in the medical cannabis business.
Little Green Pharma will use these finds to partially fund the acquisition of a $21.5 million (AUD) medical cannabis facility in Denmark. According to comments made by Little Green Pharma’s managing director Fleta Soloman to The Australian, buying the Denmark facility is a strategic step designed to expand the business by increasing medical cannabis production. While Little Green Pharma had considered expanding their Western Australia facility to accomplish this, the build was expected to take two years.
We have been speaking for some time about the need to increase our production capacity, and the Denmark facility not only gives us the cultivation and manufacturing capacity we need but does so immediately.
The Denmark facility currently has the capacity to produce 20 tonnes of biomass annually. This figure includes an estimated 12 tonnes of dried cannabis flower.
The Denmark facility will also allow Little Green Pharma to expand further into Europe’s medical cannabis market. Last week, Little Green Pharma announced an exclusive deal with one of Poland’s biggest medication suppliers. The company is also expanding in Australia after the Western Australian government awarded them $300,000 for a new production facility last August.
Rinehart’s investment in Little Green Pharma is expected to grow Little Green Pharma long term. Rinehart’s current net worth is estimated at a whopping $36.26 billion. After Rinehart’s investment in Little Green Pharma was announced, share prices temporarily increased to a high of $0.80 AUD per share.
Makes me feel a little ill. I’ll bet all her employees are subjected to drug tests that have a no tolerance approach to cannabis.
I’ll be sure not to buy anything from LGP..