AgraFlora Expands Into Germany With Farmako Acquisition

AgraFlora Organics International Inc. [stock_market_widget type="inline" template="generic" color="default" assets="AGRA.CN" markup="(CSE: {symbol} {currency_symbol}{price} ({change_pct}))" api="yf"] has purchased European medical cannabis distributor Farmako GmbH in a deal worth $11.5 million.

Farmako is based in Frankfurt, Germany and it owns subsidiaries in the UK, Luxembourg, and Denmark. Its German distribution network is said to reach more than 19,800 pharmacies and it has captured an 8% share of the country’s medical cannabis industry.

Germany is the largest medical cannabis market in Europe and it has huge potential due to its large, affluent population and a framework that sees the government cover a number of prescriptions. AgraFlora said it will now target 100,000 German patients after acquiring Farmako.

The distributor has sold 150,000 kg of medical cannabis to the German trade since inception eight months ago, seizing market share from the likes of Aurora and Aphria. Earlier this year it tied up a supply deal with Zenabis.

The UK’s Medicines and Healthcare Regulatory Agency has also granted the firm a wholesale distribution licence covering medical cannabis products. The British medical cannabis industry is in its infancy, but it also has huge potential if campaigners can convince the NHS to relax guidelines issues to doctors.

Bandon Boddy, chairman and chief executive at AgraFlora, said pursuing operations in Germany has always been a core pillar of its international growth strategy. “We have long prioritized Germany as one of the most exciting medical cannabis markets in the world given its progressive regulations, rapidly expanding patient population and insurance coverage for over 60% of prescriptions,” he said.

Boddy hailed Farmako’s first mover advantage and best-in-class operations within Germany. It is acquiring 100% of the issued and outstanding shares in Farmako in an all-stock deal worth $11.5 million, with the closing subject to terms and conditions.

AgraFlora has a greenhouse in Delta, British Columbia, which should be operational by 2020. It will eventually have the capacity to produce 250,000 kg of cannabis per year, and the firm says it will soon be the fourth-largest producer in Canada, nestled in between Aphria and Tilray.

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Martin Green
Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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