LONDON–(BUSINESS WIRE) – Kanabo Group Plc (LSE: KNB) (“Kanabo” or the “Company”), the first medical cannabis company to go public on the London Stock Exchange, has a letter of intent to acquire Materia, a leading processor and distributors of medical cannabis and CBD wellness products across Europe.
The Kanabo board of directors (the “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 critical to expanding and strengthening Kanabo’s existing value chain for medical cannabis and CBD products.
Materia has an established position in the European market with subsidiaries in Malta, Germany and the UK. After the takeover, Kanabo will control production from raw material procurement through its own production to distribution to pharmacies and end consumers. This includes direct market entry in Germany, the market volume of which was over 200 million euros last year1 and is expected to remain the dominant market as the European market grows to a forecast total of 3.2 billion euros by 20252
About materia and synergies with Kanabo
Materia’s Maltese subsidiary Materia Malta Operating Ltd. (“Materia Malta”) operates a state-of-the-art, EU GMP certified facility strategically positioned for the processing of medicinal cannabis flowers and oils. EU GMP is considered the global gold standard for the manufacture of pharmaceuticals and is a requirement for medical cannabis in most European legal systems. Through this facility, Materia Malta is able to import cannabis flowers from its global supply network of growers and process them into EU-GMP-certified medical cannabis for subsequent export to dealers across Europe. Materia Malta also intends to use its facilities and expertise to produce medicinal cannabis extracts. The current flower throughput capacity of the plant is potentially 6,000 kg per year, which corresponds to a possible sales value of € 36 million, based on a mixed average sales price in several key European markets.
Research conducted by Kanabo is being commercialized through the Materia Malta facility, including formulas developed for Kanabo’s VapePod device that are aimed at treating certain medical conditions such as insomnia, PTSD, neuropathic pain and anxiety.
In Germany, Europe’s largest market for medical cannabis, Materia Deutschland GmbH (“Materia Germany”) is a fully functional pharmaceutical wholesaler with EU GDP and EU GMP certificates, which enables it to import medical cannabis products to German pharmacies for sale. Materia Germany has agreements with numerous suppliers and has been selling its medical cannabis portfolio to pharmacy customers for over a year.
In addition, Materia’s UK subsidiary (“Materia UK”) operates as a distribution platform in the wellness sector and sells several leading brands through Handpicked CBD, one of the UK’s largest CBD e-commerce marketplaces. Kanabo will use Handpicked CBD to attract customers to its own line of CBD products and to inform its future innovation pipeline.
Avihu Tamir, Founder and CEO of Kanabo, said, “Materia’s unique innovative supply chain will provide strong sales channels in the German market and new strategic partnerships with premium growers around the world.
“Together with Kanabo’s R&D and commercialization capabilities, we will be able to develop new innovative delivery methods that open up even greater market potential. The enlarged group will become the largest publicly traded cannabis company in Europe and will place us in a unique position as the multi-billion pound medical cannabis market begins to accelerate. ”
Deepak Anand, CEO of Materia, said: “We are very excited to be working with the Kanabo team. As the first medical cannabis company to be listed on the London Stock Exchange, Kanabo’s ambition to be a market leader matches our own, and we believe our combined infrastructure will create significant value for our shareholders, partners, customers and patients. ”
The acquisition will allow Kanabo to build on the significant advances made this year. These include a supply contract with the Greek grower Hellenic Dynamic, a new EU GMP production line in partnership with Pure Origin and a unique production line contract with PharmaCann for VapePod cartridges. The company also recently announced an expansion of its partnership with The LYPHE Group, which will facilitate the delivery of Kanabo’s medicinal cannabis formula to the UK this month. In addition, Kanabo has MP Dr and run a regulated medical cannabis market in the UK and Europe.
1 National Association of Statutory Health Insurance Funds, plus estimate of private prescriptions.
2 Prohibition Partners, 2021. “The European Cannabis Report: Edition 6”.
About Kanabo Group Plc
Kanabo is creating a new standard in the medical cannabis industry by building an ecosystem that will improve the wellbeing of millions of people around the world by providing an alternative solution to smoking medical cannabis flowers. With a focus on distributing cannabis products for medical patients and THC-free products for CBD consumers, Kanabo has conducted extensive research and development to create high quality cannabis extract formulas, innovative medical vaporizers and various. manufacture non-smoking consumption solutions.
Materia is a leading independent processor and distributor of medical cannabis and CBD wellness products. Materia has developed a robust EU GMP manufacturing and distribution ecosystem to expand the legal cannabinoid market across Europe. With its research-oriented team and regulatory expertise, Materia focuses on the high-margin downstream activities of processing, formulation and distribution in markets wherever a patient needs cannabis medicine or CBD users are looking for innovative new products.