Little Green Pharma (LGP) has announced plans to separate ownership of its psychedelics business Reset Mind Sciences subject to shareholder approval.
LGP expanded into psychedelic medicines in September 2021 after being granted a Schedule 9 licence to supply psilocybin by the WA Department of Health.
The demerger will be undertaken via a pro-rata, in-specie distribution of 100% of Reset securities to eligible LGP shareholders who will then hold separate shareholdings in LGP and Reset as standalone, ASX-listed entities.
The company also plans to offer eligible Reset shareholders the opportunity to participate in an entitlement offer to fund its operations.
LGP told the ASX: “Since its formation, Reset has made significant progress in the field of psychedelics and LGP believes its shareholders’ best interests are now served by demerging the subsidiary to allow it to pursue its strategy as a standalone company.
“This will give new and existing shareholders the freedom to dictate their preferred investment appetite across the two industries.”
Post-demerger, LGP will provide Reset with ongoing operational support and product supply, including access to its licensed WA cultivation and production facilities, including a specialist mushroom cultivation capability expected to be ready in the June quarter.
LGP will convene a general meeting of shareholders to seek approval for the move and, if granted, Reset will then focus solely on developing its psychedelics business under CEO and executive director Shaun Duffy.
LGP said the demerger would unlock greater value for shareholders and allow differentiated investments across medicinal cannabis and psychedelics. It would also enable each entity to appropriately fund, resource and focus on their individual businesses, and establish two separate management teams to pursue independent strategies and growth opportunities.
LGP CEO Fleta Solomon said: “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.
“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. The demerger rewards LGP shareholders for Reset’s progress to date and allows them to participate in its exciting future.”
LGP said planning is well underway for a West Australian-based clinical trial into psilocybin-assisted psychotherapy with Reset finalising protocols after receiving a federal import permit for the synthetic psilocybin to be used in the trial.
Reset CEO Shaun Duffy added: “Reset is ideally placed to play a leading role in the evolution of the psychedelics industry in Australia.
“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.
“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.”