Medivie Therapeutic Ltd. (TASE:MDVU), which announced a week ago its plan to merge cannabis activity into it, today announced that it had obtained an investment in the new venture. Barney's Farm, a large Dutch farm for growing cannabis seeds that operates the Barney's Coffee Shop in Amsterdam, a site well-known to Israeli tourists, will invest €1.8 million in Medivie's venture, located on an unnamed kibbutz. The Israeli Ministries of Health and Finance have recommended allowing the export of medical cannabis from Israel. Medivie's share price leaped following the announcement, pushing its market cap up to NIS 26 million.
Barney's Farm will appoint a representative to Medivie's board of directors. If and when Medivie's products reach the market, they will be branded with the Barney's Farm logo and name. In additional to the investment deal, Medivie controlling shareholder Menachem Cohen (a 77% stake) undertook to give Barney's Farm first refusal rights to any shares in Medivie that he sells.
Medivie announced a week ago its intention of acquiring 51% of a kibbutz company that is setting up a farm to grow cannabis, and is also about to start a pharmacy for packaging and dispensing cannabis. Advocate Ilan Gerzi, a senior partner in the Pearl Cohen Zedek Latzer Baratz law firm, led the deal. The memorandum of understanding signed by the parties includes a commitment by Medivie to invest NIS 14 million in the activity being acquired, including NIS 2 million by the date on which the deal is signed and NIS 5 million by the end of 2017. The current investment will help Medivie meet this obligation.
The merger follows the failure of Medivie's previous activity in pain relievers, led by CEO Josh Rurka and CEO Ehud Ginati. Following a creditors arrangement, control of the company shifted to Cohen. According to the announcement to the TASE, Cohen, who owns a protected housing facility, has invested NIS 1.1 million in Medivie to date.
Published by Globes [online], Israel Business News - www.globes-online.com - on November 22, 2017
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