Little Green Pharma (ASX: LGP) continues to see strong growth from its European expansion, with CEO Paul Long delivering a December quarter update that showed revenue reaching $9.5 million. While slightly down on the previous quarter, revenue for the financial year to date has already surpassed the company’s full-year result for 2024.
Momentum is particularly strong in Germany and the UK, where LGP has secured $6 million in binding purchase orders for the next two quarters. The company’s interest in Europe dates back to 2018, but expansion accelerated in 2021 with the acquisition of LGP Denmark, which has now become a critical supply hub.
Little Green Pharma Denmark Facility
Germany remains the key driver
Germany’s medicinal cannabis market has seen a significant step-change in demand following regulatory reforms in mid-2024. In the September quarter alone, 20,000 kilograms of medicinal cannabis was imported into the country—triple the volume of the previous quarter.
LGP is capitalising on this shift, generating $1 million in German sales in December alone. With its Danish facility located just two hours from the German border, the company is well placed to meet this rising demand.
Paul Long said the decision to acquire the facility in 2021 for CA$20 million—developed for CA$120 million by its previous owner—has positioned LGP as one of the most competitive suppliers in the region.
“When we made the acquisition, some people thought we were biting off more than we could chew. But we understood the value. Today, the site is producing at a competitive cost per gram, it’s GMP-certified, and it’s strategically placed to service the biggest medicinal cannabis market in Europe. The validation keeps coming.”
Little Green Pharma CEO, Paul Long
Since taking ownership, LGP has made significant optimisation inroads, increasing tonnage produced while bringing down production costs. With demand expected to remain strong, the company has now expanded the facility’s production by an additional two tonnes, bringing total output to seven tonnes per annum with the ability to scale up to 30 tonnes.
“We’ve just brought another two tonnes online, and as demand continues, we have the ability to scale up significantly. That flexibility is a real advantage.”
UK market continues steady growth
While Germany’s growth has been driven by regulatory change, the UK’s medicinal cannabis market has expanded more gradually. Between 2022 and 2023, the market tripled in size, and UK patients now consume 144% more per capita than their German counterparts.
LGP has been active in the UK for years, and while minor regulatory delays affected shipments in the December quarter, the long-term growth trajectory remains strong.
“We’ve had a presence in the UK for a long time, and while it hasn’t had the same regulatory jolt as Germany, it’s been a gradual build. That volume is now starting to look meaningful, and we’re well-positioned to grow with the market.”
France and Spain shaping as future growth markets
Beyond Germany and the UK, France and Spain are emerging as key future markets for LGP.
France remains in its post-trial transition phase, with formal medicinal cannabis regulations expected later this year. LGP is already one of only two companies supplying the market, putting it in a strong position ahead of broader regulatory approvals.
In Spain, the government has signalled its intent to approve a medicinal cannabis framework by mid-2025, with initial product regulations expected shortly thereafter. LGP has already established an early foothold in the country, holding a 6.5% stake in a local Spanish medicinal cannabis company.
“Spain has the potential to be a major market, and we expect it to follow a highly regulated model, similar to Germany. This plays directly to our strengths in GMP-certified production and pharmaceutical-grade distribution.”
Health House acquisition strengthens supply chain
LGP recently completed the acquisition of Health House, a well-established medicinal cannabis wholesaler in Australia. The acquisition provides direct access to nearly 2,000 pharmacy accounts and eliminates wholesale margin leakage on products already sold through Health House.
“We’ve worked with Health House for years, and the integration has been seamless. It allows us to improve supply chain efficiency, cut costs, and strengthen our position in the Australian market.”
The acquisition aligns with LGP’s broader vertical integration strategy, particularly as the Australian market faces increasing regulatory scrutiny and competition.
Brand expansion continues with Lush Labs
LGP continues to refine its House of Brands strategy, launching Lush Labs, a craft-focused brand catering to premium consumers. This complements its existing brands, including:
- CherryCo (value segment)
- LGP and Indicare (premium segment)
- Lush Labs (craft segment)
“Patients are looking for unique strains with high terpene profiles, and we’ve partnered with JR Strains in Canada to bring exclusive cultivars to Australia. The early feedback has been fantastic.”
Outlook and focus for 2025
LGP’s focus for the next six months includes:
- Delivering $6 million in secured European purchase orders
- Expanding German and UK flower supply with increased production
- Extracting cost efficiencies from the Health House acquisition
- Pursuing further M&A opportunities amid the Australian market shakeout
- Launching a new specialised brand targeting an emerging patient demographic
Despite its rapid expansion, LGP remains financially disciplined. The company’s net tangible assets of $75 million significantly exceed its market capitalisation of $36 million, reinforcing its strong underlying value.
Paul Long said the company is executing on its strategy, with a clear roadmap for continued expansion.
“We’re locking in bankable purchase orders, growing our position in key European markets, and building a globally competitive business. The tailwinds are here—it’s our job to capitalise.”
