Monday, April 22, 2024

Kanabo boosts presence in UK and Europe signing LOI with Materia

Israel-founded medical cannabis R&D company Kanabo Group plc’s ambitions for a leading position in the UK and European markets are translating into deals. The firm—the first cannabis company listed on the London Stock Exchange via an RTO, in May 2017, and admitted to the main market in February 2021—has signed a letter of intent (LOI) to buy Materia, an independent processor and distributor of medical cannabis and CBD wellness products, founded in Canada, with subsidiaries in Germany, Malta, Denmark and the UK.

European good manufacturing practices (EU-GMP) certificiation was granted to the German subsidiary, Materia Deutschland GmbH, in January 2021 allowing it to import, manufacture and batch-release medical cannabis products. It supplies pharmacies in Germany. 

In May 2021, Materia Malta Operating Ltd also received EU-GMP certification. A company statement announces that Materia is “in the process of retro-fitting an existing 34,000 sq ft facility in the Ħal Far industrial estate, which will ultimately be a state-of-the-art production hub used to process and formulate cannabis products. Materia’s Malta facility will convert cannabis biomass into EU-GMP certified flower or oils to be distributed throughout Europe and the world.”

The UK arm of Materia’s operation sells wellness products through Handpicked CBD, an online store which retails CBD products from various brands including Love Hemp, Provacan, OTO and Four Five. Kanabo intends to “leverage Handpicked CBD to acquire customers for its own line of CBD products and inform its future innovation pipeline.”

A statement from Kanabo says that its “board of directors has been actively exploring new partnerships and opportunities to accelerate Kanabo’s growth and market penetration. The board believes that Materia’s complementary infrastructure will be crucial to expanding and strengthening Kanabo’s existing supply value chain of medical cannabis and CBD products…

“Following the acquisition, Kanabo will control production, from the initial sourcing of raw materials and in-house manufacturing, all the way to distribution to pharmacies and the end consumer. This includes direct entry into Germany, whose market size was over €200M last year.” (This figure is based on data from GKV-Spitzenverband (German National Association of Statutory Health Insurance Funds), plus an estimate of private prescriptions.)

Kanabo’s statement highlights other deals struck this year, including a supply agreement with Greek cultivation facility Hellenic Dynamic, a new EU-GMP production-line in partnership with Pure Origin, a production-line deal with PharmaCann for VapePod cartridges, and an expansion of its partnership with the LYPHE Group, facilitating the delivery of Kanabo’s medicinal cannabis formula to the UK.

Kanabo’s founder and CEO Avihu Tamir comments, “Materia’s unique innovative supply chain will provide strong distribution channels in the German market and offer new strategic partnerships with premium cultivators around the world. Together with Kanabo’s R&D and commercialisation capabilities, we will be able to develop new innovative delivery methods opening up an even bigger market potential. The enlarged group will become the biggest public cannabis company in Europe and will put us in a unique position as the multi-billion pound medical cannabis market starts to accelerate.”

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