Pioneering Australian medicinal cannabis grower and developer Little Green Pharma Ltd (ASX: LGP) has achieved a major breakthrough in its global expansion with the signing of an agreement with leading German firm Deutsche Medizinalcannabis GmbH (Demecan).
The binding three-year purchase agreement is for the sale, export, and distribution of LGP Classic medicinal cannabis oils and LGP-cultivated dried cannabis flower to Berlin-based Demecan.
Demecan is the only German company that covers the entire medicinal cannabis production chain; from cultivation to processing and manufacturing, through to distribution to pharmacies.
It is currently the only producer of medicinal cannabis in Germany and is a strategically important partner for LGP.
LGP Managing Director Fleta Solomon, said that Germany represents a significant opportunity for LGP as the largest medicinal cannabis market in Europe, estimated to be worth €7.7 billion (A$12.5 billion) by 2028.
The number of prescriptions for medicinal cannabis in Germany is growing rapidly; there were 95,000 prescriptions at the end of 2018 and more than 240,000 prescriptions were expected by the end of 2019.
Subject to the terms of the agreement, LGP will sell and export to Demecan up to 1,000kg of LGP-cultivated dried cannabis flower or 48,000 units of LGP Classic medicinal cannabis oil product, or any combination thereof, per annum.
The Agreement has a three-year term, which will commence on the first commercial shipment of LGP medicinal cannabis products to Germany, which is expected to take place in 2HCY2020. The Agreement secures pricing that is a premium to LGP’s medicinal cannabis oil products sold in Australia.
We are thrilled to enter into a partnership with Demecan. As the only company in Germany to cover the entire production chain for medicinal cannabis, Demecan is a leading supplier of medicinal cannabis in Germany, Ms Solomon said.
“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.”