The company will hold a general meeting on July 19 seeking approval for the appointment of Embark Ventures.
() shareholders will vote on a resolution at a general meeting next month for the company to enter into a management agreement with Embark Ventures.
The general meeting in Sydney on Friday, July 19, will involve two resolutions regarding the appointment and the possible issue of performance rights to Embark.
Shareholder approval is sought for the appointment of Embark as the company’s investment manager.
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Under a management agreement it is proposed that Embark will provide services including the identification, transacting and review of possible investment opportunities.
This role was previously performed by Jason Conroy, who resigned as CEO of the company on February 4, 2019.
MMJ Group has since been seeking a suitable replacement for Mr Conroy and believes that the appointment of Embark will meet this requirement.
Embark Ventures is part of the Embark Group which includes Embark Health Inc, a company in which MMJ holds an investment of $3.8 million.
Cannabis investment opportunity
MMJ Group is the only ASX-listed investment company offering Australian investors the opportunity to invest in unlisted and listed cannabis-related businesses locally and offshore.
In the last 12 months MMJ has converted from a cannabis operational company into a listed investment company.
In this short timeframe it has accumulated a pool of around 16,000 investors and shareholders funds of about A$90 million with most investments being offshore and predominantly in Canada.
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The MMJ board believes that the company should centre its asset management resource in Canada to better manage the existing portfolio and access new investment opportunities as the board expects the majority of MMJ’s investment portfolio to be in North America.
It believes that the appointment of Embark is a cost-effective way to ramp up MMJ’s investment operations without adding material fixed costs.
If the appointment is approved, the MMJ board will monitor Embark’s role and will reconsider the appointment of a separate CEO as necessary.
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MMJ chairman Peter Wall said: “Confirmation of the appointment of Embark Ventures is an important step in addressing the 39% discount to the fair value of MMJ’s net asset value per share.
“The board looks forward to MMJ shareholders confirming the appointment of Embark Ventures in order to provide investors with certainty over MMJ’s operating structure and allow MMJ to ramp up its investment operations.”
The board took into consideration that, with the appointment of Embark, MMJ receives access to a team of people based in Canada, MMJ’s key investment market.
One of the principals of Embark is Michael Curtis, a non-executive director of MMJ who holds about 20% of Embark Ventures.
Two resolutions
The first resolution to be put to shareholders is: “That, for all purposes, approval is given for the company to engage Embark Ventures under the terms of the Management Agreement on the terms and conditions set out in the Explanatory Statement.”
The second is: “That, for the purposes of ASX Listing Rule 10.11 and for all other purposes, approval is given for the company to issue 12,000,000 Performance Rights to Embark Ventures Inc (or its nominee) on the terms and conditions set out in the Explanatory Statement.”
MMJ’s general meeting will be held at 2pm on July 19 at the office of the Automic Group, Level 5, 126 Phillip Street, Sydney.
