Little Green Pharma Ltd (ASX: LGP) has reported a robust performance in its quarterly activities report and Appendix 4C for the quarter ending 30 June 2024. The company achieved revenues of $7.3 million, reflecting a 12% increase compared to the same period in the previous year. Cash receipts also increased to $8.2 million, a 19% increase from the prior corresponding period.
The company's CherryCo brand achieved record sales of $2.2 million, representing a 19% increase on the previous quarter. Oil sales grew by 17%, while vaporiser sales saw a significant increase of 23%. The Company will also deliver its first commercial shipment to France at the end of July, and saw encouraging results in its psilocybin clinical trial while its clinic fit out, supported by the Health Insurance Fund of Australia (HIF), is also now completed.
Paul Long, CEO of Little Green Pharma, said, "We are very pleased with our quarterly performance, including our record growth in CherryCo, our strong growth in vaporiser and oil sales, and our first commercial shipment worth $0.65m for France scheduled later this month."
CherryCo's sales growth was 19%, despite stock outages in April and competition from new product ranges. Little Green Pharma branded products saw an 8% decline in Australia but experienced a 31% increase in Europe. White label product sales were up 22% in Australia but down 11% in Europe.
Net operating cash outflows for the quarter stood at $0.4 million, driven by $0.5 million in additional inventory and SKU-related costs for new brand launches and $0.1 million related to the previous year's R&D rebate. The recent merger of the LGP and Reset head offices is also expected to save $0.2 million annually in lease expenses.
LGP has had a compound annual revenue growth rate of 35% since FY22, trading at 1x revenue with an EV/NTA of 0.4x. The company maintains minimal long-term debt of $3.4 million, with an additional unused and unsecured debt facility of $0.4 million. LGP had $4.3 million in cash reserves at the end of the quarter.
The Company is actively developing new brands and product formulations. LGP is expediting the development of new brands and product formulations to capture market opportunities presented by changing consumer demographics and trends, with two new formulation ranges scheduled for release in August 2024 and three new house brands planned for release over the next two quarters. In the quarter, the Company launched new high-THC and high-CBD cannabis oils during the quarter and reintroduced its high-selling THC 24 Lemon Glow flower product.
In Europe, LGP anticipates positive outcomes from the recent French elections, which are expected to benefit the French medicinal cannabis market. With revised pricing in the post-trial period and the introduction of larger unit sizes, the company is positioned as a key supplier in France, with the Company’s first commercial shipment of oils to the country expected in late July.
Germany is showing growing consumer and distributor demand following the recent legalisation of cannabis, with increased orders from white label customers. LGP also delivered to a new white label customer in the UK during the quarter, with follow-on shipments planned for the UK and Switzerland.
Paul Long added, "Our expansion into the European market, particularly France, positions us well to take advantage of the evolving regulatory landscape. The upcoming first commercial shipment to France marks a significant milestone for LGP as we continue to establish ourselves as a key supplier in the region."
Reset continues to progress its psilocybin clinical trial for treating refractory chronic depression, aiming to establish the gold standard in Psychedelic Assisted Psychotherapy (PAP) protocols. The company reported encouraging results from Reset’s psilocybin clinical trial for the treatment of refractory chronic depression, with the clinic fit out now completed. The clinic fit-out, supported by the Health Insurance Fund of Australia (HIF), is now complete, and Reset is developing its natural psilocybin mushroom product offering.
The proposed rescheduling of cannabis by the US Department of Justice from Schedule I to Schedule III could significantly impact the US cannabis market, removing Section 280E restrictions and potentially increasing institutional investment.
Paul Long expressed optimism about these regulatory changes, stating, "The proposed rescheduling of cannabis in the US represents a monumental shift in global cannabis regulation with the likely flow-on effects in global cannabis markets to include a re-rating of all Australian medicinal cannabis companies including LGP."
