Another Psychedelics Company Joins 'Exclusive Nasdaq Group' With Enveric's Acquisition Of MagicMed Industries

CBD-focused biotechnology company Enveric Biosciences ENVB confirmed Monday it will acquire psychedelics company MagicMed Industries in an all-stock deal.

What Happened

"It's been in the works for a little while," Dr. Joseph Tucker, CEO and president of MagicMed, told Benzinga.

According to Tucker, listing on the Nasdaq provides companies with an attractive opportunity for raising capital.

"It's a really exclusive group listed on the Nasdaq, and that access to capital is going to be a game-changer for everybody," Tucker said.

Upon closing the acquisition, Tucker will become CEO at the new company and David Johnson, current CEO and chairman, will become executive chairman.

Why It Matters - ‘Like Two Halves Of One Company’

MagicMed Industries is researching second-generation psychedelic molecules with the aim of developing medicine for various mental health conditions. It is currently studying novel molecules derived from psilocybin, also known as the active compound in “magic mushrooms” and DMT, which is the active ingredient in ayahuasca.

In another aspect of the transaction, Enveric will concentrate on establishing a pipeline of cannabinoids and other natural compounds as palliative treatments for cancer and other ailments. At the moment, it is leading preclinical work on CBD for radiation dermatitis and glioblastoma, while also studying CBD’s potential in the reduction of chemotherapy-induced pain.

With this acquisition, Enveric will obtain a new research and development sector.

"The way that we see this is very complementary,” Tucker said. “We've got this whole drug development and early-discovery side which makes a lot of great potential drug candidates, but we don't have this later stage clinical trial capability.”

Although the transaction had to be labeled an acquisition due to the different market capitalizations, Tucker sees it more as a merger.

"We're kind of like two halves of one company," he noted.

The Deal Details

Under the deal, Enveric will issue a total of 9.95 million of its shares to the shareholders of MagicMed. it will also issue warrants, options and restricted stock units enabling MagicMed shareholders to acquire an extra 9.04 million shares of Enveric.

Upon this transaction, Enveric shareholders will hold around 63.4% of the combined company’s share while the existing MagicMed shareholders will hold the remaining 36.6%.

The deal is projected to finalize in the second half of the year, upon obtaining the necessary approvals and requirements.

In addition, as part of the deal, Enveric will obtain around CA$4 million ($3.32 million) in cash from the MagicMed treasury.

What’s Next

The new Enveric will be working on improving a psychedelic molecule discovered by MagicMed for the treatment of PTSD in cancer patients. It will further explore the possibility of using it with military veterans suffering from PTSD.

"I like how the story has evolved. For both companies, we're talking naturally-sourced therapeutics. With cannabinoids and psychedelics we're treating body and mind together," concluded Tucker.

Enveric's shares were trading 10.3% lower at $2.44 per share at the time of writing.

Photo by Tumisu on Pixabay

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Posted In: CannabisM&ANewsPenny StocksMarketsDavid JohnsonEnveric Acquires MagicMed IndustriesJoseph TuckerMagicMed On NasdaqPsychedelics
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