IT'S been a big week for South West-based Little Green Pharma (LGF), with the medical cannabis company signing a binding agreement to acquire land for expansion and delivering its first shipment of medicinal cannabis oils into a French national medicinal cannabis trial.
LGP has agreed to acquire two properties underlying its South West cultivation and manufacturing facilities, as well as two adjacent properties, with a total land area of about 16,000 square metres.
The purchase is intended to help service higher-than-expected international market demand for LGP cannabis flower medicines, as well as the continued strong growth in demand for LGP's cannabis medicines in domestic markets.
Managing director Fleta Solomon said LGP had the ability to double its indoor cultivation capacity with 3000m2 available within its existing high-security fencing line.
"LGP will shortly commence planning this doubling of cultivation capacity, with construction anticipated to begin in the second half of 2021," Ms Solomon said.
"The two adjacent properties give LGP the option to again double cultivation capacity should there be a need to do so.
"In addition to securing the properties, the acquisition will eliminate annual rental expenses of $170,000 and give the company tangible assets against which to obtain financing."
LGP leases the properties that underlie its cultivation and manufacturing facilities under 20-year leases.
The company has spent more than $6 million constructing its cultivation and manufacturing facilities, investing in the fit-out of existing warehouse structures and making other capital improvements to these properties.
Last Thursday LGP made its first shipment of medicinal cannabis oil to a French national trial, which the company was appointed as a primary supplier of in January, in partnership with leading French pharmaceutical distributor, Intsel Chimos.
LGP is one of only four international cannabis companies appointed as primary trial suppliers and signifies the company's commitment to key European markets.
Ms Solomon said the shipment was scheduled to be release tested in France and made available to trial patients later this month.
"The company expects the shipment of more than 4800 units will help cement our reputation for execution capability, with the medicines being produced under strict regulator-imposed timelines," Ms Solomon said.
"At this time the company cannot forecast final medicine quantities required as this will be driven by patient demand over the course of the trial."
The trial is anticipated to catalyse the legalisation of medicinal cannabis in France, which has an expected market value of four billion euro at maturity.
"LGP's appointment as a primary supplier into the trial is anticipated to provide the company with a significant first mover and reputational advantage in France and other key EU markets," Ms Solomon said.
"The company is also negotiating the scope of its partnership with Intsel Chimos to support its post-trial market growth in the territory and in other key markets."
Participating in the trial as a primary supplier is in line with LGP's strategy of growing and holding significant market share in key European growth markets, including Germany, the United Kingdom and France.
To service these markets, the company has commenced the deployment of specialist European personnel in the region, to provide enhanced local engagement capability.
On top of the land acquisition and French shipment, LGP also received a firm purchase order from DEMECAN, a German medical cannabis company, for 9000 units of cannabis flower medicines for the second half of the year.
"The DEMECAN purchase order comprises 9000 15 gram units of cannabis flower medicines to be delivered later this year and follows the first commercial shipment of cannabis flower (500 15g units) made to Germany in February 2021," Ms Solomon said.
"LGP has a medicinal cannabis purchase agreement with DEMECAN, under which LGP will sell and export to DEMECAN up to 1000 kilograms of LGP-cultivated dried cannabis flower per annum."
LGP plans to continue to navigate new pathways with leading distributors into other key markets in the European region as well as develop new engagements within existing territories to help consolidate and further grow its market share.