Medical cannabis co Hi Pharma to merge into Ophectra

medical cannabis

Hi Pharma previously signed an agreement to be merged into Medivie Therapeutic, but the agreement was never carried out,

Ophectra Real Estate & Investments Ltd. (TASE:OPCT) today announced that it was merging Hi Pharma, owned by Kibbutz Ramot Menashe, into itself, Hi Pharma was founded in order to grow medical cannabis on the kibbutz's land.

Hi Pharma previously signed an agreement to be merged into Medivie Therapeutic Ltd. (TASE:MDVI), but the agreement was never carried out, because the parties could not agree on Hi Pharma's share in Medivie's international activity.

When the agreement between Hi Pharma and Medivie expired, Medivie CEO Menachem Cohen told "Globes" that Hi Pharma was in the process of setting up greenhouses, and a plant was in the planning stage. These assets will now be transferred to Ophectra, which will allocate 68% of its shares to Hi Pharma.

Ophectra's share price fell 5% following the announcement, pushing the company's market cap down to NIS 40.8 million, attributable mostly to real estate owned by the company.

One of the suspending conditions for the deal is for Ophectra to have NIS 8 million in cash at the time of the merger. In addition to its deal with Ophectra, Hi Pharma signed an investment agreement with Fantasy Network (TASE: FNTS) under which Fantasy will invest NIS 2 million in Hi Pharma for 4.99% of Hi Pharma's shares. Fantasy Network's share price is down 4% today, pushing its market cap down to NIS 17 million.

Fantasy Network and Ophectra previously cooperating in the cannabis field, announcing their plan to jointly acquire cannabis activity in the US, mediated by Pure Capital, whose controlling shareholder is Kfir Zilberman. Ophectra's controlling shareholders are Simon Sioma and Shimon Cohen. Fantasy Network also previously announced its intention to merge cannabis distribution company CBDigital into itself. Fantasy Network published a number of other announcements about possible mergers of business not in the cannabis field.

Ophectra CEO Shmuel Levy said, "We are glad to see progress in a very important deal for Ophectra, including a merger with an excellent company with great potential. The company's activity is now already in the advanced planning stages of setting up a farm and plant in northern Israel in compliance with the Ministry of Health's new standard. Hi Pharma's genetically diverse strands of cannabis ensure its ability to grow crops when the necessarily approvals are obtained. Hi Pharma's business plan assumes making a profit from the second year of activity, even without exports."

Fantasy Network co-CEO Dani Zadok said, "The current memorandum of understanding is an important element in our cannabis investment strategy, and constitutes a gate for our entry into growing, marketing, and distribution activity for locally grown cannabis."

Fantasy Network co-CEO David Cohen added, "We will continue looking for more attractive investment opportunities in the field. We are completing due diligence and are working towards the signing of binding agreements that will create a range of holdings in growing, production, marketing, and research activities for Fantasy Network in this growing industry."

Commenting on the deal with Fantasy Network, Hi Pharma CEO Itay Hecht said, "We welcome Fantasy Network's vote of confidence and investment in Hi Pharma. We believe that there is a basis for research and business cooperation between Hi Pharma and other activities that Fantasy Network invests in."

Published by Globes, Israel business news - en.globes.co.il - on December 24, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

medical cannabis
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