Little Green Pharma expands in budding industry
Little Green Pharma shares received a boost after the medicinal cannabis business announced the acquisition of a world-class licensed cannabis production facility located in Denmark, as well as the receipt of firm commitments to raise $27 million by way of placement to institutional and sophisticated investors.
The Denmark Facility, which meets EU GACP cultivation standards and holds an EU recognised GMP manufacturing licence, comprises of a 21,500 square metre cultivation site and 4,000 square metre post-harvest GMP manufacturing site. The facility has the capacity to produce in excess of 20 tonnes of biomass per annum including 12 tonnes per annum of GMP-manufactured cannabis flower for supply as bulk and finished medicinal cannabis flower products.
LGP acquired the facility from Canopy Growth Corporation for a total of C$20 million in cash, via an agreement to acquire 100% of the securities in Canopy Growth Denmark ApS, which owns and operates the Denmark Facility. C$10 million would be paid as initial consideration, with the remaining C$10 million payable in 12 months pursuant to a retained loan at 12.5% interest.
LGP plans to ramp up production at the Denmark Facility in line with market demand and anticipates producing LGP-branded and white-label medicines as well as bulk cannabis flower products for supply into global markets.
The acquisition is a strategic fit with LGP’s existing operations and capabilities, immediately providing LGP with additional cultivation and manufacturing capacity and accelerating its planned capacity expansion by up to two years. It is also consistent with LGP’s EU expansion strategy and provides a platform to leverage the company’s early mover advantage in key EU markets.
The acquisition positions LGP as a leading global pure-play medicinal cannabis producer and owner of one of the largest cannabis production assets in Europe.