The three months to 30 June signified a “transformational quarter” for Australian medicinal cannabis producer Little Green Pharma (ASX: LGP).
The $21.4 million acquisition of a world-class GMP (good manufacturing practice) facility in Denmark and the completion of a $27.2 million placement with support from private mining company Hancock Prospecting provided a strategic platform to capitalise on the company’s early mover status and brand recognition in various markets.
These achievements were buoyed by the $6 million acquisition of land underlying and adjoining its indoor cultivation site in Western Australia’s southwest region to eliminate costly annual rental expenses, as well as record growth in patient demand for its medicinal cannabis products.
The company posted a 37% increase in new patients to a total 3,300 (compared to 2,400 in the March quarter) and dispensed more than 11,200 units over the period (25% up on March).
Little Green Pharma’s international sales momentum resumed this month with the shipment of 2,000 units to German wholesaler Demecan following the receipt of its necessary regulatory approvals.
Binding purchase orders received from Demecan to year end will utilise the company’s entire WA flower capacity and be fulfilled subject to Australian patient demand.
A dossier was submitted by Little Green Pharma for its Desert Flame medicinal cannabis flower product to support a five-year distribution agreement with Polish company Medezin Sp. z.o.o.
Medezin is owned by Pelion SA, which is the largest operator in the Polish and Lithuanian healthcare sector with 30 years’ experience and annual revenue of around $3.5 billion.
Little Green Pharma also progressed a marketing authorisation application for Denmark and delivered 6,000 units of cannabis oil (in 15 millilitres and 50ml bottles) to French pharmaceutical distributor Intsel Chimos for a two-year trial of medicinal cannabis products in the treatment of clinical conditions which are resistant to conventional treatments.
In March, Little Green Pharma entered into an agreement to acquire 16,000 square metres of land underlying its WA cultivation and manufacturing facilities plus two adjoining properties.
The transaction will ensure the company protects its capital expenditure to date of approximately $8 million; eliminates rental expenses of $170,000 per annum; and provides rental income from tenants on the adjoining properties.
The company announced it would defer its WA expansion plans while it works on expanding manufacturing capacity at its Denmark facility to align with a planned increase in local cultivation capacity.
The expansion is expected to be finished by year end with expected costs to completion of up to $2 million.
During the quarter, Little Green Pharma generated an unaudited revenue of approximately $600,000, with cash receipts of $1.82 million.
Key cash outflows included higher production and staffing costs associated with the new Denmark facility; increased staffing and administration costs relating to expanded marketing and business activities in Australia and the European Union; and increased costs related to the development of new medicinal drugs.
Little Green Pharma said it expects to maintain a strong cash position through to the new financial year, driven by continued increases in domestic sales and further sales into the European market.