Aleafia Health (TSX:ALEF, OTCQX:ALEAF) announced a joint venture to establish a presence in the German market with pharmaceutical wholesaler Acnos Pharma GmbH.
As quoted in the press release:
The JV entity will purchase Aleafia Health branded cannabis oils for distribution to German pharmacies and for clinical trial usage. Aleafia Health’s wholly-owned subsidiary Emblem Cannabis Corp. (“Emblem”) is the majority shareholder of the JV with 60 per cent ownership with Acnos owning the remaining 40 per cent.
The Parties have expanded the scope of the previously announced JV formed by Acnos and Emblem, by leveraging the significantly increased access to dried flower and extraction available to the combined entity. The German medical cannabis market has grown rapidly since legalization in 2017, and is projected to produce revenues of C$5 billion in 2025 for cannabis producers, according to a report by Bank of Montreal. Market advantages in Germany include significantly higher margins compared to the Canadian market and reimbursement of patient purchasing costs through private and public health insurance, which is almost entirely non-existent in North America.
“We are delighted to soon see the export of our cannabis health and wellness products to the world’s largest medical cannabis market in Germany,” said Aleafia Health Chairman Julian Fantino. “By leaning on our own core competencies of producing high-margin value added products and leveraging the local supply chain expertise of our outstanding partners, we have significantly strengthened our international footprint and done so faster and at a fraction of the cost of an acquisition.”