Australia's latest listed medicinal cannabis company has launched onto the market with a bang, scoring a major UK distribution deal the night before landing.
Little Green Pharma, a Perth-based vertically integrated medicinal cannabis manufacturer, starts trading today on the ASX under the ticker LGP.
Its launch on the ASX follows an oversubscribed initial public offering (IPO) on 29 January 2020 to raise $10 million; the maximum subscription amount under its prospectus.
As such, LGP will list with around 22.2 million new fully paid ordinary shares at $0.45 and a market capitalisation of around $60 million.
The company, which produces oil-based medicinal cannabis products from locally sourced plants, intends to use the funds raised in its IPO to accelerate its growth strategy and fund its own manufacturing site.
The group currently operates its own cultivation facility and produces around 15,000 bottles of medicinal cannabis oil per annum. Post-listing LGP intends to increase this capacity to 110,000 bottles of oil every year.
While LGP's output is high the company has only dispensed around 7,600 bottles to 2,360 patients across Australia since it launched its first product in 2018.
However, compared to listed competitor Bod (ASX: BDA), who has a market cap of $25.6 million, LGP is already yards ahead; in the 12 months since Bod launched its own medicinal cannabis oil product Medicabilis it has prescribed 2,330 bottles.
Like its fellow listed medicinal cannabis companies LGP sees significant potential in overseas markets.
The group has an inroad in Europe already, after receiving its first purchase order of 2,400 bottles from Germany and just overnight signed a purchase agreement with UK-based importer of medicinal cannabis products Astral Health.
Under the Agreement, Astral Health will purchase, import, and distribute LGP's current medicinal cannabis product range to its UK-based patients, comprising LGP Classic 10:10, LGP Classic 20:5, and LGP Classic 1:20.
"The listing of LGP on the ASX is a significant achievement, and the Board would like to take this opportunity to thank patients, investors and other stakeholders for their support," says LGP managing director Fleta Solomon.
"The enormous support received for the IPO is extremely pleasing and confirms the interest in our Company and in medicinal cannabis, which has the potential to transform the lives of patients throughout the world."
"With this funding we are now in a strong position to accelerate our growth strategy to capture value in a dynamic global market as well as provide an opportunity for incoming investors to share in our exciting future."
Business News Australia