Little Green Pharma Ltd (ASX: LGP) shares are on the rise this morning following the company's announcement of a new European distribution deal. The Australian medicinal cannabis manufacturer has signed an agreement that will see its products sold in Denmark. At the time of writing, the Little Green Pharma share price is trading 1.31% higher at 77.5 cents.
Let's look closer at the company's latest news.
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Distribution in Denmark
Little Green Pharma has signed a 5-year, non-exclusive distribution agreement with Balancial Danmark ApS.
The agreement will see Balancial distributing Little Green Pharma-branded cannabis oil and flower medicines in the Scandinavian nation.
According to the company's release, the deal is another step in its plan to grow its market share in key European medicinal cannabis markets.
It has already nabbed entry points into Germany, France, and the United Kingdom.
The agreement comes with certain terms and conditions. One being that Balancial cannot market or manufacture any other cannabis oil or flower products in Denmark until it has ordered 20,000 units from the Australian company.
Another is that the Danish company must order at least 2,000 units per shipment, on a continuous basis.
Denmark is currently more than 3 years into a 4-year trial period for the use of medicinal cannabis products. Within the trial, medicinal cannabis prescriptions are 50% reimbursed (up to US$1,500 per year) by the state, and fully reimbursed for terminally ill patients.
Little Green Pharma states, since the trial's introduction, medicinal cannabis patient count and prescription volumes have been growing quickly. As of February 2020, the market was expected to be worth 500 million euros and represent 2% of the population by maturity.
Commentary from management
Little Green Pharma's managing director Fleta Solomon commented on the agreement:
LGP is pleased to announce another agreement for the distribution of LGP products into a prospective EU medicinal cannabis marketplace, and looks forward to collaborating with Balancial to help service our future Danish customers.
Little Green Pharma share price snapshot
The Little Green Pharma share price has been performing well on the ASX lately.
Currently, the company's share price is up by around 38% year to date. It's also up by around 158% over the last 12 months.
The company has a market capitalisation of around $101 million, with approximately 187 million shares outstanding.
