Little Green Pharma (ASX: LGP) has been on a roll this quarter. Increasing cash receipts by 35% from $4.4 million to $6 million, the Company has made strides in its cannabis operations. The influx of revenue was thanks to the first shipment of new strains from Denmark, which earned more than $0.5 million over five weeks to give investors an optimistic outlook for upcoming deals and sales in the Company’s European pipeline strategy.
In November 2022, the Company achieved a Human Research Ethics approval for their Phase III SleepWellStudy clinical trial for a proposed Schedule 3 CBD product launch in Australia. During this period, regulators amplified efforts to inspect and monitor the industry, requiring cannabis companies to adhere to GMP standards when selling medicinal products from 1 July 2023. Despite this timely move following the troubles of an issued infringement notice by the TGA, there is still much work to be done and due review with an impending deadline on 20 January 2023.
Last week the shipment of three new strains from Denmark arrived in Australia, which bagged the Company $0.5 million in revenue for this quarter. Now, although this is just the first step, the Company has drawn out plans to expand its sales further and explore other global markets.
Recent news points to Europe being a battleground of deals when it comes to the medical cannabis industry. The Company managed to break its contract with Four-20 Pharma when the Company contracted a replacement distribution partner based in Germany, Cannamedical Pharma GmbH. Not to mention, there was also an unsuccessful attempt to acquire approval for the Italian contract, with it going instead to a Spanish medical cannabis supplier. On a more positive note, the French government recently announced an extension of their pilot medical cannabis trial until March 2024 – though this comes with a pessimistic outlook considering the current state of affairs.
Reset Mind Sciences, the Company’s psychedelics-focused subsidiary, is currently in the process of final fit-out at a construction contractor’s site in Perth. However, Reset continues to prioritise plans for a demerger, though the execution of these plans is still subject to reimbursement of any costs incurred prior to the demerger announcement.
To wrap up this quarter, the Company generated $5.3 million in revenue and over $6 million in cash receipts, mostly in part due to customer-facing initiatives. Additionally, the raising of $4 million was achieved through an institutional placement in late 2022, as well as an SPP that raised a total of $2 million. $2.3 million of the capital was returned via an R&D rebate to repay its R&D financing loan as well as draw down its equipment finance costs amid other loans held by the Company, these include; $0.20m to directors, and Canopy Growth Corporation’s outstanding CAD$3 .6 million loans, leaving them with a bank balance of $7.1m after all expenses were accounted for.
Trading Desk Assistant at Emerald Financial
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