Medical-grade cannabis producer MGC Pharmaceuticals spiked more than 80 per cent on Friday after it announced a deal to supply a South Korean cosmetics company with cannabidiol (CBD) cosmetic products.
The small-cap MGC said on Friday that under the deal with Varm Cosmo, the South Korean company， would buy a minimum of 15,000kg a month of CBD cosmetic products, generating A$40m ($31.3) in annual revenue for its MGC Derma joint venture.
The value of South Korea’s beauty market is expected to reach about $13bn this year, according to market researcher Mintel.
Shares in MGC surged as much as 81.6 per cent before paring gains to be up 68.4 per cent at a six-month high of $0.064.
MGC claims cannabidiol – a non-psychoactive compound – can be used to treat psoriasis and inflammation.
Hwang Jung-Yoon, chief executive of Varm Cosmo said the company’s products contain 1ml of CBD, “providing the most effective moisturising solution while making your skin young and healthy.”