OrganiGram’s (CVE: OGI) share price climbed 8.6% after the Canadian firm snapped up a 25% share in German medicinal marijuana supplier Alpha Cannabis Germany (ACG).
The company paid €1.625 million ($1.87 million) for 8,333 common shares of ACG, which recently launched a CBD kit that will be available in more than 20,000 pharmacies throughout Germany, Austria, and Switzerland. OrganiGram said a presence in the fast-growing German market is crucial to its international expansion drive, while it is also seen as a gateway to the rest of Europe.
The markets responded well to the news and shares in the New Brunswick-based firm climbed up to C$7.34 ($5.62). OrganiGram was founded in 2013 and it has built up a distribution network across Canada. Strains it supplies include Highlands, Lighthouse, Torbay, Wabanaki, Baleen, Hunter’s Corner, Low Tide, and High Tide, ranging from $7 to $9 per gram.
Its portfolio of brands includes The Edison Cannabis Company, Ankr Organics, Trailblazer, and Trailer Park Buds. OrganiGram’s primary facility is in Moncton and is regulated by Health Canada.
Earlier this month OrganiGram invested C$5 million ($3.83 million) in European hemp producer Eviana, based in Serbia. Chief executive Greg Engels said that move marked the beginning of its international aspirations and now it’s diving into the German market.
Engels, who was appointed chief executive last year as Denis Arsenault stepped up to become executive chairman, is excited about the new partnership with ACG. “This relationship is a perfect example of two companies coming together towards a common goal, and we’re very excited to build our business in Germany through our partners at Alpha Cannabis,” he said.
OrganiGram will now supply ACG with dried flower, while it will import CBD isolate from ACG for the North American market. They will also work in tandem to purchase licenses to supply medicinal cannabis to German pharmacies. The deal is subject to administrative formalities under German law.
ACG was only founded in 2016, but it has already become one of Germany’s leading distributors of medical marijuana, with expertise in developing, producing and marketing derivatives and medicines. Its managing directors said they see significant potential in jointly materializing the medicinal benefits of cannabinoids in Europe with OrganiGram.