Irish medicinal cannabis producer GreenLight Pharmaceuticals has sold a 25% stake to SOL Global (CSE: SOL; Frankfurt: 9SB; OTCQB: SOLCF) to fund an expansion drive.
The Dublin-based firm was founded in 2014 and it focuses on researching, developing, and licensing molecules from proprietary cannabinoid formulations to treat a range of conditions. It aims to create 500 research and development jobs by 2021 and it needs funds to take its products to a wider international audience.
It, therefore, decided to sell a 25% equity stake to SOL Global for €1.8 million ($2 million), with an option to increase that stake to a controlling 51%. SOL Global has also paid a further €1 million for the option to acquire a 75% stake in a future GreenLight subsidiary that hopes to successfully obtain a cannabis cultivation license in either the Republic of Ireland or Northern Ireland.
Northern Ireland is in the UK, which recently legalized medicinal cannabis. The Republic of Ireland agreed to permit medicinal marijuana back in 2016, but there are considerable obstacles in both countries.
In Ireland, the government claims it cannot find a suitable supplier, so an industry has not yet been rolled out. In the UK, protestors claim that the NHS guidelines are too strict and they essentially prevent doctors from actually prescribing cannabis.
But GreenLight remains bullish about its chances in both countries. “In 2019 we expect to see the roll out of full medicinal cannabis markets in Ireland and the UK,” said chief executive James Linden. “GreenLight is primed to perform well in these developing markets with our top quality and affordable plant medicines.”
GreenLight also has a food supplements program that supplies the UK and Ireland, while it is starting to make inroads into France, Russia, Poland, and the U.S. It already has distribution arrangements in place with 1,000 pharmacies across Ireland and the UK, which could prove advantageous if and when full cannabis markets are rolled out in those countries.
SOL Global’s director Rob Reid and chief medical officer Michael Barnes will join the GreenLight board to lend their expertise as the firm bids to expand internationally. They hope to help it become a leader in Europe’s nascent medical cannabis industry.