Australian medical cannabis company Little Green Pharma (ASX:LGP) has its sights set on making a big splash in Poland.
The company announced last week it had signed a 5-year distribution agreement with Medizin for LGP’s medical cannabis oils and flower products in Poland. Under the agreement, Medizin has exclusive distribution rights in the country, assuming sales hurdles are cleared.
Medezin is a 100% owned subsidiary of Polska Grupa Farmaceutyczan S.A. (“PGF”), which LGP states is one of the three leading full-range wholesalers in Poland; boasting a 20% share of domestic deliveries to pharmacies.
“Our distribution agreement with Medezin reflects LGP’s strategic ambition to acquire and maintain a substantial share of the Total Addressable Market in each jurisdiction we supply,” said Little Green Pharma Managing Director Fleta Solomon.
Poland is seen as potentially lucrative market given all doctors are able to prescribe cannabis medicines for any condition they determine could be treated or managed by them. Poland is fully reliant on imported medicines and has a population of approximately 38 million.
In other recent news from the company, LGP also stated last week the firm is seeing good ongoing growth in Australia, with an average of 1,080 new patients per month during April and May, compared to 800 per month in the previous quarter.
“This has translated to a 20% increase in the monthly average number of units dispensed by distributors,” states the company.
But LGP has also experienced a bit of a hiccup, albeit one that appears to be relatively easily overcome.
Back in February 2020, the company entered into a purchase agreement with Germany’s Demacan for up to 1,000kg of LGP products annually over a three year term. Demacan recently placed a $2.5 million firm purchase order for the second quarter of the next financial year, but is yet to receive one of the needed permits to import the remaining ~7,000 units (value: ~$800,000) of its 9,000 unit order for the June 2021 quarter.
While LGP said there isn’t any reason not to expect it in the near term, if Demacan doesn’t receive the approval before the end of the June quarter LGP will instead package this product for Australia, where LGP can generate more revenue from it. Then, assuming Demacan subsequently secures the necessary approvals, future Little Green Pharma cannabis crop allocations planned for use for products for the Australian market will instead be redirected to Demacan.