Medical cannabis company AusCann Group Holdings (ASX: AC8) has announced plans to buy CannPal Animal Therapeutics (ASX: CP1) for $17.5 million.
AusCann Group Holdings is one of Australia’s largest manufacturers, distributors and producers of cannabis medications. AusCann is best known for ‘Neuvis’, it’s prescription brand of THC and CBD capsules. Neuvis products were launched last year for patients on the Special Access Scheme (SAS).
While AusCann treats humans, CannPal Animal Therapeutics focuses on hemp and cannabis health products for animals. The company is due to release the DermaCann skincare line for dogs later this year, selling in Australia and internationally.
Earlier this week, CannPal entered a scheme implementation deed with AusCann. If approved by shareholders, the companies will merge as soon as March 2021 and will continue operations in both the human and animal cannabis industry.
AusCann’s chairman Max Johnson believes this merger will increase the prospects of both companies, as both companies have heavily invested in market research and development.
The combined resources position the new company well to take a leadership position within this new health industry sector.
CannPal’s biggest shareholder is the Merchant Opportunities Fund, which owns a 19.88% share. According to comments published in Stockhead, the fund intends to vote in favour of the merger.
Meetings discussing the merger are expected early next year, with shareholders receiving scheme documents in January. If approved, CannPal shareholders would receive 1.3 shares in AusCann for each held share.