Kanabo Group hails news contract signed by Materia
(KNB ) said Materia's wholly owned subsidiary Materia Deutschland has secured a deal in which it will distribute German-produced medical cannabis extracts.
The Israeli-based medicinal cannabis firm which made its debut on London’s main market in February 2021, announced the proposed acquisition of Materia, an independent processor and distributor of medical cannabis and CBD wellness products focusing on the European market, back in July 2021.
As reported by the Times, the deal to acquire Materia is expected make Kanabo Europe's biggest publicly traded cannabis company. Kanabo said the proposed acquisition wass reflective of its ongoing efforts to actively explore new partnerships to accelerate its growth and market penetration.
The Board believes that Materia's complementary infrastructure will be crucial to expanding and strengthening its existing supply value chain of medical cannabis and CBD products.
Today, Kanabo noted a recent announcement from Materia, in which it stated that its subsidiary, Materia Deutschland, has now entered into an agreement with German medical cannabis manufacturer, Eurox Pharma, to distribute German-produced medical cannabis extracts.
According to market data, extracts are the fastest growing format in Germany's medical cannabis market, exhibiting around +62% sequential quarterly growth at the beginning of this year.
A report named ‘Insight Health Market Report’ states that as at the end of 2020, medical cannabis extracts had been distributed across almost one-fifth of public German pharmacies.
Since its flotation to London’s Stock Exchange, shares in Kanabo Group have seen an over three-fold increase from its entry price of 6.5p.
Kanabo said the new agreement will ‘importantly add a new line of cannabis extracts products for Materia Deutschland's curated portfolio and help accelerate the expansion of its distribution network across Germany, including new pharmacies that dispense extracts.’
Commenting on the distribution agreement, Nick Pateras, Managing Director of Europe at Materia, said, "This is a strategic step forward in our preparation for the market's increasing adoption of medical cannabis in the form of extracts. Our sales team is already trained and equipped to win new pharmacy customers with the addition of this new format."
According to reports from Reuters, Materia’s main focus to date has been on the German market, with Executives calling it “market number one, two and three” back in May 2021.
Following the completion of the Materia acquisition, Kanabo will acquire direct entry into the German market, which was valued at over €200m last year, and is anticipated to remain the dominant market as the European market grows to a forecasted total size of €3.2bn by 2025, according to Prohibition Partners.
Today, Kanabo highlighted to investors that it is currently undertaking the due diligence process and working on reaching a definitive agreement alongside Materia in regard to the closing of the proposed acquisition which still remains subject to a number of conditions.
In a recent interview with CNBC, CEO Avihu Tamir discusses Kanabo’s listing on the London Stock Exchange and the market opportunity for medicinal cannabis in the U.K. and Europe.
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