Block Commodities shares soar on acquisition of medicinal cannabis licence in Zimbabwe
(BLCC ) said that together with Century Cobalt Corporation ("CCOB"), it has entered into an agreement to purchase a 70% interest in a Medicinal Cannabis licence.
The commodity-focused trading company, which is focused on value in African agriculture, said the two parties will acquire the medical cannabis licence granted to Magnus Cannabis Group Limited from the Government of Zimbabwe in exchange for a 35% holding each.
The option is for an exclusivity period of 90 days to complete the acquisition. This will include the payment of an £0.05m option fee, to be apportioned equally between both parties. BLCC will pay £1.5m through the issue of 2,142,857,142 fully paid ordinary shares at 0.07p.
The company explained to investors that a 35% stake in the Magnus licence will secure supply of medicinal grade cannabis for the production of cannabis-based nutraceuticals.
Block Commodities announced its entry into the legal cannabis market as an operator of cannabis licences in jurisdictions where this is legally permitted in March 2019. The company’s plan is to produce cannabis products in Africa to supply the European market.
Block believes the cannabis market represents a strategic move. By leveraging on its existing connections in Africa, the group believes that the use of blockchain technology can add significant value to the production and distribution of medicinal cannabis products.
According to Grand View Research, the global legal marijuana market size is expected to reach $73.6bn by 2027, with an anticipated CAGR of 18.1% during the forecast period.
Greenbelt Update
In separate news, the Company said it is no longer pursuing the acquisition of Greenbelt Company Limited, pursuant to an option agreement date 27 March 2019, as the relevant Cannabis legislation is no longer under consideration by the Sierra Leone government.
The group previously entered into a Binding Contract with shareholders of Greenbelt Company Limited to acquire a 100% interest in the company which holds a licence of over 4,000 acres of farmland in Sierra Leone which it leases to licensed retail cultivators.
Shares in Block Commodities soared 68.18% to 0.0185p this morning following the news.
Its 35% stake in the medicinal cannabis licence is expected to secure a sufficient supply of medicinal grade cannabis which will enable it to advance its production of Nutraceuticals.
Reasons to Follow BLCC
Block Commodities has outlined that its strategy is to maximise the value of African agricultural and other commodities through the deployment of blockchain technology.
The resources will be linked through the vertical integration of primary industries down to consumers via blockchain platforms. Using blockchain's ability to incorporate all market participants into an efficient ecosystem, the company aims to facilitate the commercial operation of such ecosystems in the context of the agricultural production cycle.
The Company launched its “Farmer 3.0" pilot project in Uganda back in September 2018, a blockchain system called Farmer 3.0 that connects participants in the commodities market.
Through deploying disruptive technologies, Block is also developing strategies in the fast-growing cannabis market. Upon its entry in 2019, it stated that the potential number of medicinal cannabis patients in the UK is estimated to reach as high as 2.9 million patients.
It said this underlines the long-term opportunities in the industry while Europe is remains poised to become one of the world's largest cannabis, hemp and cannabidiol importers. It said the European medical cannabis market could be worth over €55 billion by 2028.
Block said it has worked to develop several opportunities to access the development of medicinal cannabis in low-cost jurisdictions, including options to acquire interests in cannabis licences in Sierra Leone, Lesotho, Niger, and Malta.
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