Akanda has seen its share price slip by around 10% this week after it announced plans to sell its Portuguese operations for $2m, seeing it offload a key source of revenue.
On February 02, the international medical cannabis company said it had signed an extended ‘Letter of Intent’ (LOI) with Somai Pharmaceuticals to sell its subsidiary RPK Biopharma.
According to the announcement, the stipulated purchase price of the deal was dropped from $2.7m and includes ‘all current liabilities of RPK which are approximately €4m’.
This deal included an initial deposit of $500,000, with the remainder due on the successful completion of the transaction once the ‘customary due diligence’ has been completed.
In its two most recent financial updates, RPK, which is indirectly held by Akanda through Holigen Limited, represented almost the entirety of its income.
In the six months to June 30, 2023, Akanda reported income of $1.4m, $1.3m of which was generated by RPK. Despite this, the subsidiary remained unprofitable, reporting a net loss of $2m over the period.
It came alongside news that Akanda had closed its ‘previously announced registered direct offering’ for the sale of 280,851 common shares at a price of $0.406 per share. It also issued pre-funded warrants, allowing the purchase of around 1,462,991 common shares at $0.4059 per share.
Akanda’s offering raised gross proceeds of around $708,000, which the company says it intends to use to fund ‘capital expenditures, operating capacity, working capital, general corporate purposes and refinancing or repayment’ of existing loans.
German cannabis stocks jump on positive progress
Germany’s listed cannabis companies have seen their stock prices jump in double digits this week following reports of positive progress on the CanG bill from government ministers.
Last week, Business of Cannabis reported that deputy parliamentary leaders of the coalition parties had suggested they plan to push ahead with the bill despite vocal opposition from within the SPD party.
The bill is now expected to pass through the Federal Parliament (Bundestag) this month, putting it back on track to come into effect by April 1.
This saw stock in Cantourage, SynBiotic and Cannovum Cannabis AG jump by 35%, 39% and 53% respectively as investors regained confidence the ambitious legislation was likely to pass through the Bundestag.
Cannovum, which holds a majority stake in the company Anbau-Allianz für Deutschland GmbH, targeted at the upcoming legalisation of cannabis cultivation associations, said it believes the ‘growth and sales potential of legalisation for Cannovum is enormous’.
“According to our calculations, a single club in Germany can generate up to €2.4m per year with cannabis. We expect there to be several thousand clubs in Germany in the medium term,” says Cannovum’s CEO, Klaus Madzia.
Furthermore, Cannovum said that it was well positioned to cash in on the anticipated boom in Germany’s medical cannabis market due to its investment in Cannovum Health eG.
According to equity research company NuWays AG, the declassification of cannabis should also ‘translate into a significant tailwind for players such as Cantourage’.
“Thanks to its broad global supplier network more than 60 grower partners, its own recently launched telemedicine platform, telecan°, and a growing distribution network across Europe, we regard Cantourage as well positioned to benefit from this change,” is said in a note to investors.
German vertically integrated cannabis firm SynBiotic was also a key beneficiary of this positive investor sentiment, building on an upwards trajectory in its stock price seen since mid-January.
Just days into the new year, SynBiotic announced the latest addition to its continually growing roster of investee companies, helping position itself to capitalise on home cultivation.
On January 03, 2024, the company announced the acquisition of Austrian hemp products retailer Bushdoctor, which is reportedly developing a joint franchise concept for the German market alongside SynBiotic.
Daniel Kruse, Managing Director of SynBiotic, said: “I am very pleased to welcome Harald Schubert, an extremely experienced pioneer and valued hemp entrepreneur… as part of the SynBiotic family. From now on for the coming phase of decriminalisation, liberalisation and legalisation of hemp and cannabis products in Germany, but also Europe, Harald’s experience is invaluable.”
According to the company, the acquisition will mean SynBiotic is ‘ideally equipped to benefit from further developments in legalisation’ due to its extensive product range focused on home cultivation.
Canadian cannabis firm Allied Corp also announced that it has signed a new three-year sales and distribution agreement ‘for the UK market’.
In a press release, the company said it had signed a deal between an unnamed ‘EU-GMP manufacturing channel partner’ and a similarly unnamed ‘licenced medical cannabis distribution company located in the UK’.
Under the agreement, Allied will provide medical cannabis grown in its main production facility in Columbia to the UK ‘through its EU-GMP manufacturing partner’ for three years from the date of signing, with unspecified ‘minimum monthly order quantities and a yearly volume commitment’.
“This achievement is the result of the company’s dedication to expanding its commercial efforts in 2023 and marks a significant milestone as we are set to enter one of the most promising European markets,” says Juba Hadid, VP of Global Sales.