The distressed junior miner scene has one explorer turning to the budding medical marijuana market.
Yesterday ASX listed junior Capital Mining announced its intention to acquire nearly half of Canadian medical marijuana manufacturer and distributor Broken Coast Cannabis.
The acquisition is priced at around CAD$5.99 million to acquire 24 per cent of the business, with a one year option to increase the stake to 49 per cent for an additional CAD$18 million.
This new agreement sees Capital Mining become the first ASX listed company to hold direct stakes in a licence grower and distributor of medical cannabis under Canada’s Marijuana for Medical Purposes Regulations.
Broken Coast currently has the capacity to produce 720,000 grams of cannabis annually.
Capital has also entered into an agreement with bulk wholesale cannabis, industrial hemp, and derivatives products company Cannan Growers to acquire 100 per cent of the business.
The miner will acquire the company and the rights to Cannan’s IP and licence applications.
Junior miners in Australia and Canada have reportedly been turning to technology and medical marijuana companies to act as a vehicle for backdoor listing.