- LGP has cemented access to European markets with the recent commercialisation of its 30-tonne-per-annum cannabis production facility
- With many new genetics being developed, the company recently saw three new cannabis flower products arrive in Australia
- The company is pioneering studies for next year’s registration for over-the-counter CBD products in Australia
- If its European distributors purchase the minimum volume commitments to maintain their product exclusivity, the LGP can reasonably expect $45 million of revenue over the next few years
- The global cannabis industry is projected to increase tenfold from 2020 to 2030
With a strengthened foothold in European markets, 2022 has been a pivotal year for medicinal cannabis play Little Green Pharma (LGP).
The company doubled its revenue over the year and positioned itself as an industry pioneer in providing medicinal cannabis products to international and domestic markets.
Founded in 2017 and headquartered in Perth, LGP operates a vertically-integrated business model meaning, it cultivates, manufactures and supplies pharmaceutical-grade cannabis medicines to patients across the world.
The company has two global production sites for LGP-branded and white-label licensed medicinal cannabis products, with its new Danish facility capable of producing more than 30 tonnes per annum (tpa) of medicinal cannabis biomass and its Australian facility capable of producing about 3tpa.
A burgeoning industry
The cannabis industry is a rapidly growing sector, with more and more countries around the world relaxing restrictions around cannabis-related products.
In the last decade alone, countries such as Canada, the UK, Mexico, Uruguay, Thailand, Australia, New Zealand and many countries in Europe have legalised cannabis for medical use, with many of these countries legalising the plant for recreational use also.
Globally, the cannabis industry is set to explode from a US$20 billion (A$30 billion) industry in 2020 to nearly US$200 billion by 2028 — an astonishing compound annual growth rate (CAGR) of 32 per cent during that period.
Here in Australia, the medicinal use of cannabis has been legalised since 2016, though only the ACT permits recreational use — a fact seen by many in the sector as a precursor for it to be legislated by federal parliament for personal consumption in the near future, according to the Greens.
The Penington Institute’s Cannabis in Australia 2022 report has Australia’s cannabis market rapidly expanding, with last year’s revenue estimated at $230 million, up from a meagre $30 million in 2019.
There are about 40 ASX-listed companies in this sphere, with the top 20 having a combined market capitalisation of more than $2 billion.
SleepWell and over-the-counter access
LGP is pioneering studies for CBD products to be more accessible for Australian consumers and is an early actor in the domestic market.
Late last month, the company secured a vital human research ethics approval for its Phase III ‘SleepWell’ study.
The results of the SleepWell trial aim to support the company’s proposed Schedule 3 CBD product registration for its products to reduce stress and aid people suffering from insomnia.
The move comes off the back of Australia’s Therapeutic Goods Administration (TGA) decision in late 2020 to reclassify certain CBD products from Schedule 4 (prescription only) to Schedule 3, or over-the-counter (OTC), which is intended to make CBD much more accessible through pharmacies without a prescription.
LGP CEO Fleta Solomon said its clinical trials were an important step for the Australian cannabis product market and to further grow the company’s footprint into the domestic supply chain.
“We are delighted to receive ethics approval for LGP’s SleepWell study, which is yet another significant achievement for the LGP team and its product and drug delivery innovation strategy,” Ms Solomon said.
“This represents a significant milestone for Australian patients along the pathway to ultimately accessing Australian-made CBD products at their local pharmacy over the counter.”
Ending 2022 on a high
In July last year, LGP acquired a Danish cannabis research and production facility to cultivate cannabis flowers as part of a strategic plan to increase its market capacity.
Earlier this month it announced its breakthrough commercialisation from the new facility with the arrival of 6500 units of three new LGP-branded, high-THC cannabis flower products in Australia.
The production and shipment of the new products give LGP sizeable growth into a booming domestic market and will complement the company’s existing local production.
LGP said it expected a further 4000 units of a fourth new flower product to enter the country this month.
“We’ve worked so hard to streamline our Danish operations, which has been an 18-month process, involving a comprehensive strain development program,” Ms Solomon said.
With more products coming online over the next few months and increased production capacity, LGP seems to have everything in place to further expand both its domestic and international market presence.
Ms Solomon said that while Australia’s fledgling cannabis industry was highly important to company goals, it was the international space that LGP was currently targeting for sales growth, having already penned sales agreements with minimum purchase commitments to maintain product exclusivity which could be worth $45 million in revenue over the next few years.
Through these agreements, the company expects to gain a respectable share of the German market alone and is already the number one supplier to the French government’s medicinal cannabis trials.
It is also one of only two suppliers to the Italian government.
“With over 500 million people in Europe, this is a really exciting position for us to be in moving forward,” Ms Solomon said.
“2022 has been an amazing year for Little Green Pharma and a really transformational period for our international aspirations, and our foothold in key European jurisdictions continues to be strengthed.
“Importantly for our investors, we’ve doubled our revenue in FY22 to $14.8 million and are in a really great position for growth.
“Moving into 2023, it’s all about the profitability pathway, which we are laser-focused on and we have a solid sales pipeline.”
Perhaps we’ll be calling it not-so-Little Green Pharma in the near future.