Melbourne-based medicinal cannabis company Althea (ASX: AGH) has signed an agreement that will see it crack into the German market.
Distributor Nimbus Health GmbH ('Nimbus') will sell Althea's medicinal cannabis products in Germany through its pharmacy network as part of a memorandum of understanding ('MoU').
Althea hopes to capitalise on the fast-growing German medicinal cannabis market which is estimated to become the largest in Europe.
The Australian company will utilise Nimbus' access to approximately 25 per cent of medicinal cannabis patients in German through its pharmacy network.
Based on expected timelines provided by Germany's Federal Institute for Drugs and Medical Devices and Australia's Office of Drug Control, Althea anticipates the first shipment of its medicinal cannabis products will arrive in Germany in the first half of 2020.
To support entry into the German market, founder and CEO Josh Fegan, winner of the Melbourne Young Entrepreneur 2019 Trailblazer Award and finalist in the Australian Young Entrepreneur Awards 2019, will relocate to London.
The company also plans to launch a localised version of its Althea Concierge platform and Medicinal Education in Cannabinoids learning portal for the German market.
The two tools will provide comprehensive medical education for healthcare professionals and streamline the process required to prescribe Althea products.Althea says the tools will fill a gap in the German market which lacks educational initiatives focused on clinical evidence and patient access to medicinal cannabis.
"Through these initiatives, and with Nimbus' substantial market position, Althea believes it will be ideally positioned to compete in the German market and quickly build market share," says Althea.
Fegan says the partnership with Nimbus will accelerate and strengthen the company's launch in Germany.
"We are very pleased to have entered into this MoU with Nimbus," says Fegan.
"Working within an existing and successful distribution channel in German is a low risk and high reward strategy for us. The regulatory and social acceptance of medicinal cannabis use in Germany is favourable and we are expecting immediate patient growth in what is one of Europe's largest and most affluent countries. I am looking forward to relocating to London so that I can oversee the next phase of growth in our UK operations and facilitate a timely entry into the German market, during what is an exciting period for Althea and its shareholders."
According to Prohibition Partners' recently released global cannabis report Germany has become a leading player in the European cannabis sector since legalising medical cannabis in 2017.
The report found that 60,000 people were treated using medicinal cannabis in 2018 with an estimated value of $119 million.
The research group estimates that by 2024 over one million German patients will have access to medicinal cannabis and by 2028 the industry in the country will be worth $12.4 billion.
Shares in Althea are up 3.45 per cent to $0.45 per share at 10.23am AEDT.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support