Hong Kong-based pharmaceutical firm Meilleure Health International Industry Group issued 312 million new shares to Hemp Investment Group, a Chinese hemp producer, for around HK$109 million (US$13.92 million) in order to explore the therapeutic uses of cannabis in China. As a result of this move, shares in Meilleure rose by as much as 35% on Thursday, February 22.
According to Meilleure Health, net proceeds from the share subscription will be used to enlarge the company’s capital base as well as to prepare for business development opportunities related to the hemp health industry. The company also wants to explore the production of treatment and prevention products for diseases like epilepsy and Alzheimer’s diseases, as well as analgesics and antidepressants, using cannabinoids as core component.
The new shares issued to Hemp Investment Group represent 7.98% of the pharmaceutical company’s enlarged share capital. Meilleure Health said before the market opened that it would be allotting 312 million new shares at HK$0.35 per share to Hemp Investment, which is jointly controlled by Tan Xin and Zhang Ke. Zhang holds 70% equity interest in the Chinese company while Tan holds 30%.
The HK$0.35 per share price of the new shares represents an 18.6% discount to Meilleure’s HK$0.43-per-share closing price on Tuesday.
Meilleure Health is controlled by Zhou Xuzhou, who is also the founder and chief executive officer of U-Home Group International.
Hemp Investment Group is China’s only company with a hemp cultivation license and a hemp lower and leaf processing license. These licenses are compliance with the Good Manufacturing Practice standards.
Meilleure Health also said in a statement that its deal with Hemp Investment Group will allow the two companies to build closer ties and will facilitate cooperation between them when it comes to coming up with health and pharmaceutical products, including skin care and functional food items.
China is the largest hemp producer in the world, accounting for about 50% of the global hemp production. China is also the largest hemp paper and hemp textile exporter. In some Chinese provinces, like Heilongjiang and Yunnan, the production of hemp is also legal.
Hemp is a variety of cannabis plant, specifically the cannabis sativa species, that is mainly grown for its industrial uses. Unlike other cannabis plant varieties, however, hemp contains lower concentrations of tetrahydrocannabinol or THC. THC is the psychoactive chemical component in cannabis that creates high. Hemp leaves and flowers can be used to make products with potent anti-inflammatory and pain relief properties.
It can be recalled that last week, Wuhu Meilleure, which is a fully owned unit of Meilleure Health, agreed to acquire 20% of hemp product processor Hansu Biotechnology for CNY60 million (US$9.4 million). Hansu Biotechnology, which is a subsidiary of Hemp Investment Group, is based in Yunnan province.
According to data from the Yunnan provincial government, the province has granted hemp cultivation licenses on more than 36,300 acres of land since the year 2010.
About Hemp Investment Group
Hemp Investment Group Co., Ltd., which is also known as HMI Group, specializes in hemp whole industrial chain investment, which includes planting of hemp, extraction, research and development, production, and sale of industrial hemp products all over the world. It also covers bio-pharmaceuticals, textile fiber, composite materials, daily necessities, and biomass.
Yunnan Hansu Biotechnology Co. Ltd. is a subsidiary of Hemp Investment Group. Hansu specializes in industrial hemp plant extraction, where it applies modern extraction technology in the isolation of cannabidiol or CBD, the non-psychoactive chemical component in hemp. CBD is believed to have strong medical benefits.
About Meilleure Health
Meilleure Health International Industry Group Ltd. is an investment holding company engaged in the trading of chemical materials and health care products, as well as building materials.
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