Melbourne-based Althea Group (ASX: AGH) is on track to becoming the first commercial supplier of Australian manufactured medicinal cannabis extract products in Germany, after the country's authorities recently granted all the necessary licences for sale and distribution.
The breakthrough comes a year after Althea signed a memorandum of understanding (MoU) with German distributor Nimbus Health GmbH to sell its products in the market, although at the time it was forecast the first sales would take place in the first half of 2020.
The outbreak of COVID-19 set back those plans, and despite the delays the two companies entered a supply and distribution agreement in May.
Germany's Federal Institute for Drugs and Medical Devices has now given Althea the green light, allowing Althea and Nimbus to apply for the required import and export permits.
Althea expects the first shipment of 2,000 products to take place in December 2020 and will receive payment for products supplied to Nimbus, along with a 50 per cent profit on the net profit of sales.
Nimbus intends to adopt the same sales strategy that has been successfully implemented by Althea in Australia and the UK, including an in-field sales team used in conjunction with a localised version of its signature Althea Concierge platform - a proprietary technology that provides useful information and progress tracking data to health professionals and patients alike.
As part of the deal, Althea will retain ownership of all real-world anonymised patient data collected through Althea Concierge
Althea believes it is well positioned to become the market leading medicinal cannabis brand in Germany, with an addressable market that is expected to be worth 1.5 billion euros ($2.4 billion) by 2025.
"We are very pleased that all relevant licenses have been granted. This will now allow Althea to focus on the sale and distribution of our products in the German market through Nimbus," says Althea founder and CEO Josh Fegan (pictured), who won the Trailblazer category at the Melbourne Young Entrepreneur Awards 2019.
"We expect to see rapid uptake given Althea's reputation and Nimbus' established market presence in Germany."
Nimbus founder and CEO Linus Maximilian Weber said it was amazing to see how both companies' teams have worked closely together to achieve this milestone.
"We are very pleased that Nimbus is the first distributor bringing Australian made extracts to patients in Germany and will further increase the value of cannabis-based medicines in country," Weber said.
While the AGH share price is still far from its peak of around $1.20 last year, it has risen steadily since the depths of the COVID-19 market crash, boosted particularly by the roll-out of online sales.
At the time of writing shares are up 3.19 per cent at $0.485 each.
Business News Australia