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- Medical cannabis business Little Green Pharma (LGP) announces a planned demerger of its psychedelics business, Reset Mind Sciences, into a separate ASX-listed entity
- LGP formed Reset in late 2020 and says the subsidiary is now in a position to pursue its strategy as a stand-alone company
- Little Green Pharma plans to divest Reset through an in-specie distribution of Reset shares to existing eligible shareholders
- The company’s next step is to seek shareholder approval and to have the demerger greenlit by relevant regulatory bodies, with the June quarter set as a broad-strokes completion date
- Shares in Little Green Pharma are up 1.85 per cent on the back of today’s news, trading at 55 cents as of 2:21 pm AEDT
Medical cannabis business Little Green Pharma (LGP) has announced a planned demerger of its psychedelics business, Reset Mind Sciences, into a separate ASX-listed entity.
LGP said in an announcement to investors today it would look to separate from Reset Mind through an in-specie distribution of Reset shares to eligible existing LGP shareholders.
This means shareholders who wish to maintain their interest in the psychedelics sector will be able to take up an interest in the new public entity, and LGP will also give Reset shareholders a chance to take part in an entitlement offer to help fund Reset’s operations.
Why the demerger?
LGP said with an increasing body of research globally into the use of psychedelic medicines to treat a range of mental health conditions, the industry had been gaining “significant momentum” in Australia.
An example of this momentum is the Australian ethics approval granted to ASX-listed Incannex Healthcare (IHL) to trial a psychedelic-based medicine for treatment against severe anxiety back in October 2021.
In light of the psychedelic industry’s growth, LGP formed Reset in late 2020. LGP said its subsidiary had made major progress since its inception and was now in a position to pursue its strategy as a stand-alone company.
LGP Chief Fleta Solomon said the company had investigated significant effort into advancing Reset’s operations throughout 2021.
“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,” Ms Solomon said.
“We believe the demerger rewards LGP shareholders for Reset’s progress to date and allows them to participate in its exciting future.”
Looking ahead, LGP said its next step in the demerger plan was to seek approval for the move from shareholders and relevant regulators. The company said it was hoping to complete the demerger before the end of June this year.
Reset’s CEO, Shaun Duffy, said the company was “ideally placed” to play a leading role in the future Australian psychedelics industry.
“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 the attention of many experienced organisations and individuals as potential partners,” Mr Duffy said.
“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.”
Shares in Little Green Pharma were up 1.85 per cent on the back of today’s news, trading at 55 cents as of 2:21 pm AEDT. The company has a $99 million market cap.
