ONE of Israel’s oldest cannabis companies has set out on a path to further rapid growth with a quick-fire run through the early part of 2021.
Earlier this month IM Cannabis announced the launch of Wagners its first adult-use cannabis brand, through its Canadian subsidiary Trichome JWC Acquisition.
At the same time it also inked a deal, through its Israeli partner Focus Medical Herbs, for a supply of ultra-premium cannabis strains from The Flowr Corporation, following a supply deal with craft Canadian licensed producer GTEC Holdings in March.
In April, it announced the purchase of Canadian firm MYM Nutraceuticals and its subsidiary Highland Grow.
In May, it announced the closing of a US$35m fund raise, which followed the purchase of Israel’s largest retail and online pharmacy business from Panaxia.
It is currently constructing a large EU-GMP warehouse at Bad Oldesloe – near Hamburg – capable of handling medical cannabis for its German subsidiary Adjupharm.
And, all of this activity followed its debut on the NASDAQ exchange earlier this year.
Oren Shuster, CEO, said the company was launched in 2010 in Israel to supply medical cannabis to patients, adding: “We may be old; but we are very young in our international presence.”
He said the NASDAQ listing was designed to access a new investor base which now includes US institutions. The proceeds being used to develop the business though M&A as well as developing its business activity; ‘marketing and promotion’.
Its approach will vary between geographies and verticals in the industry and will be driven by acquisitions, he says.
The Panaxia retail acquisition has mapped out its immediate Israeli strategy as it is look to take, what is primarily, an on-line brand on to the High Street.
In Canada, it is looking to acquire more premium cannabis companies to allow it to deliver more capacity to high-margin target markets.
Mr Shuster said: “Our grow facilities in Canada will supply the domestic markets, Israel and EU. Israel will grow for its home market and export to the EU and our new German facility will serve local markets and export to EU.”
In Europe, IM is looking to add to its existing cultivation capacity with its Spanish partner by securing grow partnerships in Portugal and Greece.
The new Hamburg facility will support Adjupharm, an EU-GMP manufacturer, and its partners to deliver to the pharmacy network – and Mr Shuster is looking forward to rapid growth in the German next year.
“The German market today is not so big, although it’s still the biggest in Europe.
“When we look at Germany and Europe we see that everything takes time and the volumes are not there yet. We believe that it will not be until 2022 that we will begin to see larger volumes in Germany.”
Its recent activity means IM’s maximum grow capacity totals around 15 tonnes – a significant increase on last year’s five tonnes with Mr Shuster confident of it abilities – as a seed to-sale, multi country operator – of selling this at high margins.
Germany imported over 10 tonnes of cannabis in 2020 and many have raised concerns that with over 40 companies supplying the market there exists an oversupply.
However, Mr Shuster believes the over-capacity perception may well be theoretical with many suppliers touting five tonnes of supplies, but realistically only capable of deliver around one fifth of that due to issues around EU-GMP compliance and inconsistent cultivation.
He added: “Once there is an over-capacity then we will see the prices coming down, and that is not happening yet.”
He went on to say that one of the big issues in Germany is the price but he expects to see this fall closer to the black market price.
This will lead to higher uptake from the patients with only two-thirds of patients currently being reimbursed through the state system.
Launching in 2010 IM Cannabis went on to supply 5,000 Israeli patients a month and the clinical and medical data it now possess provides a solid evidence base on what strain, and quantities, help for particular indications.
He added: “This data is crucial and the fact we had been able to collect this for so many years puts the company in a very strong position going forward.”
@For the year ending December 31, 2020, IM posted revenues of $15.9m. Its EBITDA for the year was a loss of $4.9m which it said was was ‘impacted by increases in the company’s corporate expenses primarily resulting from its mergers and acquisitions efforts, public listing expenses, and increased salaries and selling and marketing expenses, mainly in Germany’.
Peter McCusker is the Founder and Editor of BusinessCann and an experienced news and business editor, who believes it’s time to fully embrace the multiple, proven, medical benefits of the cannabis plant. BusinessCann covers the ins and outs of the growing European Regulated Medical Marijuana marketplace. Peter can be reached at [email protected].
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