MMJ Group Holdings Ltd (ASX:MMJ)—a global cannabis investment company—has concluded the financial year with an impressive 33% investment return, after the value of its portfolio of listed and unlisted holdings grew to $95.5 million in 2019.
The MMJ Group's portfolio of investments offers exposure to large sections of the cannabis and hemp value market, with a particular focus on consolidation, acquisition potential and possible market leaders.
The portfolio currently has four listed investments which are estimated to be worth a combined $49.5 million, along with another nine unlisted investments totalling $19.4 million. The company also holds approximately $26.6 million in cash and other investment receivables.
Previously, the three publicly listed holdings in MMJ's portfolio—as of June 30, 2019—were Fire & Flower Holdings (CVE:FAF), Harvest One (CVE:HVT) and Medipharm Labs (CVE:LABS). However, the start of this month saw a new addition to this list after one of the company's unlisted investments, BevCanna Enterprises, went public on the Canadian stock exchange on July 2, trading under the name BEV.
And the value of MMJ's portfolio of assets is likely to receive further boosts in the future, as a number of its unlisted holdings are currently seeking additional funding from the market to more aggressively pursue their investment plans.
According to statements from the MMJ Group, the company's $95.5 million portfolio represents a net tangible asset value—before tax—of 38.74 cents per share.
In early June the company also revealed that it had instigated a share buy-back, while simultaneously updating the market on its dividend policy.
As part of the company's active approach to capital management, MMJ Group intends to buy-back up to 10 million shares on market, over the following 12 months. The decision to pursue this was prompted by the discount that MMJ shares are trading to NTA, which led the company's board to conclude that a buy-back would be a value accretive use of its funds.
The dividend update pertains to the MMJ Group's decision to distribute 20% of its annual profits after tax—excluding unrealised gains and losses on investments—proceeding from FY20.
Dividends will be payable within three months of each half year period, following the finalisation of the half year and annual financial statements. MMJ's management have also confirmed that the company's intention is for the dividend to benefit from any available franking credits held in its portfolio.
The MMJ board have stated that they believe the company should centre its asset management resources in Canada—as a means of better managing its existing portfolio—while also providing access to additional investment opportunities in North America.
The MMJ Group will hold a general meeting on July 19 to seek approval for Embark Ventures to be appointed as the manager of its investment portfolio. Embark claims that it can achieve the company's goal of seeing its share price trade at a premium to its net asset value represented by its NTA, which it will achieve through a combination of deal sourcing and leveraging off of related companies.