ASX Health Stocks: Cannabis play Little Green Pharma signs $7.5m German supply deal

Cannabis company Little Green Pharma has signed a large-volume, take-or-pay deal to ship a new high-THC strain into Germany.

Probably how folks are feeling at Little Green Pharma at the moment. Picture; Getty Image

Cannabis company Little Green Pharma (ASX:LGP) has signed a large-volume, take-or-pay contract with Four 20 Pharma for the exclusive supply of a new high-THC strain into Germany.

The agreement is LGP’s largest single-strain offtake quantity contract to date, with a minimum take or pay commitment of $7.5 million over 30 months.

The contract is for LGP’s recently-developed high-THC (25% THC) SMS strain, and will further expand LGP’s traction in Germany following the exclusive deal it signed with Demecan in April.

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“We’re very excited by our new SMS strain as well as the opportunity to be partnering with Four 20 Pharma, one of the largest medicinal cannabis operators in Germany,” said LGP CEO Fleta Solomon.

“They have a highly successful track record of supplying its 420 Natural brand cannabis products into the German market,” she added.

LGP has been making rapid progress in signing up supply deals lately.

In the Demecan deal, LGP has the potential to supply up to 1.3 tonne per year, representing an annual revenue opportunity of around $9 million in white-label flower from its Danish facility.

An agreement with UK’s Sana Life Sciences in the UK in May for the company’s branded CBD oils was also worth a potential $1.44m in revenue.

LGP owns two global production sites for its white-label ranges of GMP-grade medicinal cannabis products.

The Denmark facility is a 21,500m2 cultivation and 4,000m2 GMP manufacturing facility capable of producing over 30 tonnes of medicinal cannabis biomass per annum.

The WA facility meanwhile, is capable of producing ~3 tonnes of medicinal cannabis biomass per annum.

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Apiam Animal acquires two veterinary networks

Apiam Animal Health (ASX:AHX) has signed agreements to acquire the assets of Victorian Equine Group (VEG) and Romsey Veterinary Surgery.

VEG will be Apiam’s third high-performance cornerstone referral equine centre, which will provide Apiam with an expert referral equine offering in all eastern states of Australia.

It will also forms a basis for Apiam’s equine services expansion in Victoria.

Meanwhile, Romsey Vet Surgery is a rapidly growing clinic servicing mixed animals (including equine) located in a major growth corridor of Melbourne to Bendigo.

The clinic business is benefiting from a growing equine presence in that region.

The total combined consideration for the acquisitions is $13.75 million, and will be funded via $9.8 million in cash and the issue of $4 million of Apiam shares.

There will also be an additional earn-out payable to the vendors of VEG of up to $1.2 million, based on FY22 performance.

This content first appeared on stockhead.com.au

At Stockhead, we tell it like it is. While Little Green Pharma and Apiam Animal Health are Stockhead advertisers, they did not sponsor this article.

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