Perth-based Little Green Pharma (ASX: LGP) has today announced its intention to demerge subsidiary Reset Mind Sciences in a bid to capitalise on the strong momentum of the psychedelics sector.
The medicinal cannabis producer believes the move would be in the “best interest” of shareholders and will allow Reset to “pursue its strategy as a standalone company.”
If approved by shareholders, the demerger gives Reset the opportunity to solely focus on developing is psychedelics business, and will become its own unlisted entity during the June 2022 quarter.
“We have invested significant effort investigating and advancing Reset’s psychedelics operations throughout 2021 and believe it is now at a point where it is best placed to grow as a standalone business,” LGP CEO Fleta Solomon said.
“We are confident the demerger will allow for both Reset to drive its psychedelics strategy and LGP to focus solely on its medicinal cannabis business.
“We believe the demerger rewards LGP shareholders for Reset’s progress to date and allow them to participate in its exciting future.”
LGP initially entered the psychedelic space in September last year after it received a licence to supply psilocybin from the Western Australian Department of Health.
Since then, Reset has commenced the construction of its stand-alone psilocybin mushroom cultivation facility, which is expected to be completed in the June 2022 quarter.
The company has also made progress on a WA-based clinical trial into psilocybin assisted psychotherapy, which has received a federal import permit for synthetic psilocybin and is currently finalising protocols for the trial.
Post-demerger, LGP will continue to provide Reset with operational support and product supply.
“The psychedelics industry is now gaining significant momentum in Australia which includes support from the Australian Government for medicinal psychedelics research through a $15 million grant program awarded in January 2022,” LGP said.
As part of the split, Shaun Duffy will be appointed as CEO and executive director of Reset, Angus Caithness as executive director and Honourable Cheryl Edwardes AM as a non-executive director and chairperson.
“We believe Reset is ideally placed to play a leading role in the evolution of the psychedelics industry in Australia,” Reset CEO Shaun Duffy said.
“We’ve been able to make significant progress drawing on the expertise, experience and facility investment that exists in LGP, and our first mover status has allowed us to attract attention of many experienced organisations and individuals as potential partners.”
“While we plan to continue to maintain a close operational relationship with LGP, operating as a standalone company with our own board, management and strategy will allow us to better prioritise and focus on advancing our psychedelics business.”
Subject to shareholder approval, as well as satisfactory ASX and other regulatory approvals, the company will distribute 100 per cent of Reset shares on issue via an in-specie distribution to eligible LGP shareholders pro-rata to their shareholding held in LGP as at a record date within the June quarter.
Little Green Pharma enters partnership with Curtin University for obesity research
Little Green Pharma has also teamed up with researchers at Curtin University to explore the use of medicinal cannabis treatment options for obesity and other related health issues.
Led by Professor Marco Falasca from Curtin’s Medical School, the study will aim to identify one or more combinations of cannabinoids that may produce effects in the gastrointestinal tract to induce a feeling of fullness and a decrease in appetite, potentially leading to weight loss and even diabetes reversion.
Professor Falasca said the research could be a game-changer for those struggling with obesity and type 2 diabetes.
“I am delighted to start this collaboration with LGP and very thankful for having the opportunity to expand my research in the field of medicinal cannabis in relation to obesity and gastrointestinal diseases,” Falasca said.
“Obesity has reached epidemic proportions globally with at least 2.8 million people dying annually as a result of being overweight or obese and current drug treatments have significant adverse side-effects and need to be injected by patients.
“Some of the more than 100 cannabinoids present in the cannabis plant cannabinoids have been shown to have therapeutic potential for obesity. Our research will seek to unlock further understanding of the role these cannabinoids can play in regulating gut function, their mechanism of action and optimal dosing for therapeutic effect to help weight loss.”
It is anticipated that the research findings will allow Curtin and LGP to move to the next phase of testing these drugs in human trials.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support