The latest medicinal cannabis company to list on the ASX, Little Green Pharma (ASX: LGP), is off to a smoking start after obtaining a three-year export deal with a German cannabis giant.
LGP has signed a purchase agreement for the sale, export, and distribution of its medicinal cannabis oil and dried cannabis flower to Berlin-based Deutsche Medizinalcannabis GmbH (DEMECAN).
DEMECAN is in the business of the medicinal cannabis production chain. It processes, manufactures and distributes the drug to pharmacies in Germany, making this deal a significant moment for LGP's European strategy.
Under the agreement LGP will export up to 1,000kg of dried cannabis flower or 48,000 units of its medicinal cannabis oil product to DEMECAN per annum over a period of three years.
"We are thrilled to enter into a partnership with DEMECAN," says LGP managing director Fleta Solomon.
"Germany is home to the largest population in the European Union and a rapidly growing medicinal cannabis industry. However, patient access to medicinal cannabis in Germany has been limited to date, with inadequate domestic production that is unlikely to produce sufficient product to satisfy the German market in the near term."
"The Agreement with DEMECAN allows LGP to expand its sales and distribution footprint in Germany to meet the growing demand for medicinal cannabis."
LGP launched on the ASX earlier this month, scoring a major UK distribution deal the night before landing.
Its introduction on the ASX followed an oversubscribed initial public offering (IPO) on 29 January 2020 to raise $10 million; the maximum subscription amount under its prospectus.
The group currently operates its own cultivation facility and produces around 15,000 bottles of medicinal cannabis oil per annum. Post-listing LGP intends to increase this capacity to 110,000 bottles of oil every year.
Shares in LGP are up 3.70 per cent to $0.42 per share at 11.07am 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