Little Green Pharma (LGP) Ltd, 3.1% owned by SEED Innovations Ltd (AIM:SEED, OTC:FFRIF) (SEED Innovations Ltd (AIM:SEED, OTC:FFRIF), SEED Innovations Ltd (AIM:SEED, OTC:FFRIF)), said its Danish branch has signed a sales agreement with Demecan, a German medicinal cannabis company.
SEED Innovations invests in medical cannabis and wellness businesses.
As part of the three-year sales agreement, LGP Denmark will supply three high THC flower strains for a minimum order quantity of 450kg per annum of each strain to be distributed in Germany.
The deal represents an annual revenue opportunity of roughly US$6mln for the Australian listed medical cannabis producer, according to a statement.
Two of the first three strains are expected to be delivered in the third quarter, with the final strain towards the end of the year.
Under the terms of the agreement, Demecan has the right of the first offer to exclusively supply the products across the European Union, excluding Poland.
Demecan must also pay 50% of the development costs for each strain successful developed, the statement said.
“Today's news regarding a major agreement to supply cannabis flower medicines for distribution in Germany is further evidence of its growing profile in Europe and supports our belief that LGP is going to be a big winner on the continent and beyond,” said Ed McDermott, chief executive of SEED.