Little Green Pharma Ltd (ASX:LGP) has acquired a world-class cannabis GACP cultivation and EU-recognised GMP licensed cannabis production facility in Denmark and has received commitments to raise A$27.2 million by way of placement to institutional and sophisticated investors.
LGP plans to ramp up production at the Danish facility in line with market demand and anticipates producing LGP-branded and white-label medicines as well as bulk cannabis flower products for supply into global markets.
The acquisition positions LGP as a leading global pure-play medicinal cannabis producer and owner of one of the largest cannabis production assets in Europe.
Accelerating growth strategy
Managing director Fleta Solomon said: “The acquisition is a step change for LGP.
“We have been speaking for some time about the need to increase our production capacity and the Denmark facility not only gives us the cultivation and manufacturing capacity we need but does so immediately.
“We are well-positioned in the market to capitalise on the brand equity LGP has built in Europe and Australia, with the Denmark facility providing immediate access to medical-grade product at volumes that will allow us the opportunity to accelerate our growth strategy.
“We are confident this acquisition is an efficient use of our capital and will drive long-term value for our shareholders.
“The Denmark facility provides more than eight times the capacity of our previous planned production expansion.
“We greatly appreciate the support of our institutional shareholders in helping us accelerate our growth strategy.”
Support from Hancock Prospecting
Placement proceeds will be applied to part-fund the acquisition, build-out the company’s European sales team and fund capital expenditure works and working capital requirements.
Little Green Pharma received significant support from Hancock Prospecting, one of Australia’s largest mining and resources companies, which committed A$15 million under the placement and will hold more than 10% of the company following placement settlement.