Why the MGC Pharma (ASX:MXC) share price is smoking the market today

The MGC Pharmaceuticals Ltd (ASX:MXC) share price is smoking the market on Wednesday after releasing an update on its UK operations…

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cannabis leaves on a rising line graph representing growth of ASX cannabis share price

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The MGC Pharmaceuticals Ltd (ASX: MXC) share price has been smoking the market on Wednesday.

In afternoon trade the medicinal cannabis company's shares are up 8% to 3.9 cents.

This latest gain means the MGC Pharma share price is now up almost 63% since the start of 2021.

Why is the MGC Pharma share price smoking the market today?

Investors have been buying MGC Pharma's shares today following an update on its listing in the United Kingdom.

According to the release, the company's shares were admitted to the standard sector of the London Stock Exchange (LSE) on Tuesday.

This admission follows the completion of a successful capital raise of 6.5 million pounds through an oversubscribed placement to UK based institutional funds, high net worth family offices, and professional investors.

This made MGC Pharma the first cannabis-sector company to IPO on the main market of the LSE in the United Kingdom.

Management advised that the net proceeds of the capital raise will be used to meet the costs associated with its priority clinical trials including ArtemiC and CannEpil. It will also be used to increase the distribution of its product range, general working capital, and the completion of its manufacturing facilities in Malta.

"Significant moment"

MGC Pharma's Chief Executive and Managing Director, Roby Zomer, believes this is a significant moment for the company.

He said: "The LSE listing is a hugely significant moment for MGC Pharma, our admission to LSE follows the successful capital raising of £6.5 million which will be used to immediately commence the priority clinical research trials of our leading products, expand our distribution network into key sales markets, as well as advance the construction of our manufacturing facilities in Malta."

"We are proud to make history as the first medical cannabis company on this historic Exchange. I would like to thank the MGC Pharma team and the advisors for all their hard work to make this happen. We look forward to updating our new and existing shareholders as we progress this programme," he added.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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