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Seed Innovations Ltd (SEED)

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Tuesday 19 April, 2022

Seed Innovations Ltd

Investee Company Update: Little Green Pharma

RNS Number : 6156I
Seed Innovations Limited
19 April 2022
 

Seed Innovations Ltd / AIM: SEED / Sector: Closed End Investments

19 April 2022

SEED Innovations Limited ("SEED" or the "Company")

Investee Company Update: Little Green Pharma Ltd

 

SEED Innovations Ltd, the AIM quoted company investing in fast growing and industry leading businesses with a focus on the medical cannabis, health and wellness space, is pleased to note an announcement from Little Green Pharma Ltd ('LGP').

 

 SEED owns a holding of 7,324,796 ordinary shares in LGP representing 3.1% of LGP's issued share capital.   

 

Ed McDermott, CEO of SEED, commented : "We are delighted with LGP's progress as it fast-tracks its European growth strategy.  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." 

 

The following extract from the announcement is set out without material changes or adjustments   and  the announcement in full can be accessed from the link below this section.

 

 

19 April 2022

 

LGP Denmark signs major sales agreement with Demecan

 

LGP signs its largest offtake agreement to date.

First major supply agreement from Denmark facility.

Three-year term supplying over 1.3t of flower per annum post ramp up.

 

Highlights

· LGP Denmark signs major three-year sales agreement with long-standing foundation distribution partner Demecan for the supply of cannabis flower medicines

· Agreement for the supply of three high-THC flower strains with minimum order quantities of 450kgs per annum of each strain post ramp up to maintain exclusivity (~1.3T of flower per annum across the three strains)

· First two strains expected to be delivered in Q3 CY2022 with the third later in the year

· Agreement represents annual revenue opportunity of approximately A$9 million (€6 million)

· Significant milestone for LGP which demonstrates the quality and supply from the Denmark facility - aligns with LGP's wider strategy of partnering with quality global distribution partners to gain market share in Europe

 

Under the Agreement, LGP will provide Demecan with three high-THC strains (>22% THC) for distribution in Germany. To maintain strain exclusivity and following a ramp-up period of between 6 and 12 months, Demecan is required to purchase at least 450kgs per annum of each strain. This represents approximately A$9 million (€6 million1) in total revenue per annum for the three strains.

 

Material terms of the Agreement

· 3-year exclusive supply of three high-THC strains to Demecan for distribution in Germany

· Demecan has a right of first offer to purchase the agreed strains for exclusive supply in the remainder of the European Union (other than Poland)

· LGP has a 12-month window to develop the agreed strains within specification, with subsequent supply subject to the normal conditions such as obtaining approvals to supply into Germany and entry into a GMP Quality Agreement

· Demecan has right to inspect first flower development crops and may exclude strains based on saleability criteria, in which case LGP may at its option nominate alternative strains for development and offer the excluded strains to third parties

· Demecan must pay 50% of the development costs of each strain successfully developed, subject to caps under the Agreement

· Following relevant ramp-up periods, Demecan must purchase at least 38kgs per month to maintain strain exclusivity in Germany, with supply periods of at least 3 years for each product

· Product pricing is tiered based on the sales price achieved with customers and pharmacies, LGP entitled to terminate the Agreement on notice if at any time its cost of production exceeds the product purchase price

 

About Little Green Pharma

Little Green Pharma is a global, vertically integrated and geographically diverse medicinal cannabis business with operations from cultivation and production through to manufacturing and distribution. The Company has two global production sites for the manufacture of its own-branded and white-label ranges of GMP-grade medicinal cannabis products, being a 21,500m2 cultivation and 4,000m2 GMP manufacturing facility capable of producing over 20 tonnes of medicinal cannabis biomass per annum located in Denmark (EU) and an indoor cultivation and manufacturing facility located in Western Australia capable of producing ~3 tonnes of medicinal cannabis biomass per annum. Little Green Pharma products comply with all required Danish Medicines Agency and Therapeutic Goods Administration regulations and testing requirements. With a growing range of products containing differing ratios of active ingredients, Little Green Pharma supplies medical-grade cannabis products to Australian, European and overseas markets. The Company has a strong focus on patient access in the emerging global medicinal cannabis market and is actively engaged in promoting education and outreach programs, as well as participating in clinical investigations and research projects to develop innovative new delivery systems. For more information about Little Green Pharma go to: www.littlegreenpharma.com

 

- Ends -

 

For further information on the Company please visit  www.seedinnovations.co  or contact: 

 

Ed McDermott /

Lance de Jersey

SEED Innovations Ltd

Email: [email protected]

 

James Biddle /Roland Cornish

Beaumont Cornish Limited,

Nomad

 

Tel: +44 (0) 207 628 3396

Isabella Pierre /Damon Heath

Shard Capital Partners LLP

 

Tel: +44 (0)20 7186 9927

Catherine Leftley /Isabelle Morris

St Brides Partners Ltd,

Financial PR

 

Email: [email protected]

 

Notes 

SEED Innovations is an AIM quoted investment company focused primarily on disruptive high growth life sciences and technology businesses particularly within the medical cannabis arena. The Company's strategy is to identify early-stage opportunities that have an upcoming investment catalyst and grow its portfolio in terms of value whilst limiting the number of investee companies to a level where relevant time can be devoted to each.

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