Mining magnate and Australia’s richest person, Gina Rinehart, has pumped $15 million into a Perth-based medicinal cannabis company.
This is her first investment in the burgeoning Australian medicinal cannabis industry, a sector that some believe could become world-leading, including Health Minister Greg Hunt.
Rinehart has invested the money through her mining and agriculture business, Hancock Prospecting, which has purchased 10% of WA cannabis-industry leaders, Little Green Pharma (LGP).
Little Green Pharma announced that the $15 million investment was acquired as part of a bigger $27.2 million round of capital raising that will be used to help the company purchase an established medicinal cannabis facility in Denmark. The company already owns a vast cultivation facility in South-West WA.
“We have been speaking for some time about the need to increase our production capacity,” Rinehart said according to The Australian.
“The Denmark Facility not only gives us the cultivation and manufacturing capacity we need but does so immediately. We won’t be constrained by the two-year build and permitting time required to expand our existing West Australian Facility,” she added.
LGP managing director Fleta Solomon said the acquisition was a “step change” for the company, that would provide over eight times the capacity of its previous planned production expansion.
“We are confident this acquisition is an efficient use of our capital and will drive long term value for our shareholders”, she said.
Rinehart made her fortune in mining, dropping out of the University of Sydney where she studied economics to work for her father’s mining company, Hancock Prospecting.
When he died, she inherited the company and turned it into the largest mining operation in Australia. She is also the second-largest cattle producer in the country.
Her wealth is currently estimated at $36.28 billion according to the most recent edition of The Australian’s The List.
Hancock Prospecting will pay 60c per share in LGP. Little Green Pharma shares were up 7.7% to 70c in morning trade and are up 90% over the past 12 months.
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