RE: Move into the 3s this week31 Oct 2022 11:59
The Company continues to invest in research and development associated with supplying the French Trial which is scheduled for completion in March 2023. Post completion of the Trial LGP is ideally positioned to capitalise on their significant brand equity and first mover advantage in the French Market.
LGP has invested to build a dominant EU distribution platform and now has supply arrangements or investments in 10 jurisdictions, one of the largest EU GMP production facilities in Europe, a world class genetics database, and market access to over 76% of EU and UK citizens.
European sales contracts with minimum commitments: Subject to these European supply arrangements satisfying their conditions precedent and LGP’s partners meeting their minimum purchase commitments, these existing transactions have a combined potential value of $45.4 million1 in revenue over the next three years.
The Company continues to execute its strategy of developing bespoke, high-value white label strains for export to Europe, with the Company signing a key supply agreement with Cannamedical Pharma GmbH (“Cannamedical”)2 in October for ~$4.5 million (€3 million)3 over two years. As indicated in the European sales pipeline diagram on page 4, this agreement represents LGP’s fourth key contract for the supply of medicinal cannabis into Germany and gives LGP access to three of the four largest independent, own-branded medicinal cannabis distributors in the largest market in Europe.
Subsequent to the award of the Italian tender in February5, the Company and the Italian Government agreed to supply an additional €100,000 of cannabis flower in Q4CY2022 under the tender terms, bringing the total value of the award to $465,000 (€300,000).
In addition, the Company has also submitted a bid in connection with a further tender by the Italian Government valued at $2.5 million (€1.6 million), of which LGP is one of only two bidders. Italian Government flower tenders impose some of the highest GMP product quality standards globally, with LGP being one of only two suppliers to have previously been awarded a tender. The results are expected to be announced mid-November.