THE re-branded MMJ PhytoTech will control the complete supply chain from cultivation to distribution after Phytotech raised $4.8 million to buy MMJ Bioscience.
MMJ PhytoTech chief executive Andreas Gedeon said the merger made the company one of the only serious players in the medical cannabis market.
"If you don't own the supply chain the company can't exist because you can't buy the cannabinoil compounds, it has to be sourced from plants," he said.
The company will cultivate cannabis plants at its Canadian subsidiary, United Greeneries, with the aim of exporting extracted compounds to MMJ PhytoTech's Swiss operation where it will be sold in pill form.
PhytoTech is one of the only producers of organically derived active pharmaceutical ingredients (APIs), such as cannabidiol (CBD), that makes medical marijuana products affective, Mr Gedeon said.
"Laws created internationally around the 1950's banned different things," he said.
"Almost by mistake some classified and regulated cannabis the plant but others only disallowed THC - the psychoactive ingredient that makes you high.
"Cannabidiol has the THC extracted, freeing it from some regulatory restrictions in parts the European Union."
Mr Gedeon said the paper work to get the company's CBD capsules, Sativol, approved as a food supplement took a year to complete while its Canadian operations stared down regulatory hurdles for a decade.
But the pot entrepreneurs stand to be handsomely rewarded for their pioneer efforts because organically derived compounds can sell for up to $350,000 a kilo.
"In the last week, we had a six-figure order," Mr Gedeon told AAP.
The company has it sights set on expanding into Australia's infant medical marijuana industry which was given a multi-million dollar cash injection by the NSW government.
PhytoTech last made headlines in February when its colourful co-founder and chief executive Ross Smith stepped down amid reports he threatened critics on stock market forum Hot Copper.
Share prices plunged 12 per cent after it was widely reported Mr Smith said he would visit the critics home with his personal Israeli special forces bodyguard.
Prior to his company listing on the ASX, Mr Smith said he aimed to be "the George Clooney of medical cannabis."
Mr Gedeon confirmed Mr Smith had no active role within the newly merged company other than being a shareholder.
Phytotech shares closed 1.5 cents higher at 35.5 cents.
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