Little Green Pharma Ltd (ASX: LGP) has entered into a medicinal cannabis distribution agreement with Sana Life Sciences Ltd for the supply of LGP-branded Classic Oils, Desert Flame flower, and a further balanced flower product currently in development, for distribution in the United Kingdom and UK crown dependences.
Under the Agreement, the parties grant each other mutual exclusivity in the Territory for the supply or distribution of LGP 10:10 Classic Oil and medicinal cannabis oils with the same or similar ratios, subject to Sana meeting certain minimum exclusivity purchase thresholds per annum.
With a potential revenue opportunity of A$1.44m (£820,0001) per annum in the third year just for the 10:10 oil, together with additional revenues from sales of the remaining oils and flower ranges, the Agreement represents a key step in LGP’s twin strategy of selling its own LGP-branded sales into the UK and EU while developing and supplying client-specific white-label strains for clients across Europe.
- The Agreement Term is three years from first import with extension by agreement
- Minimum purchase orders for flower products between 10- and 20- kilograms post ramp-up and 500 oil units per shipment
- Sana to provide purchase orders to confirm supply – first purchase order expected end CYQ2 or early Q3
- LGP may pass on 50% of any increases in cost of production above 110% of its production costs as at date of Agreement
