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Frankfurt-based Farmako, a wholesale pharmaceutical cannabis company, has been acquired by Vancouver-based AgraFlora Organics International Inc., the fourth largest producer of pharmaceutical cannabis worldwide.
AgraFlora has bought 100% of the shares in The Good Company, Farmako’s parent company, for a price tag of €15 million. Farmako was founded at the end of 2018 and is already the third largest independent wholesaler of medical cannabis in Germany, with €1.6 million in revenues from the distribution of pharmaceutical cannabis since its operational start in March 2019.
The company received the necessary permits and licenses for distribution in February 2019 and has now positioned itself as one of the leading distributors in the German market. The distribution network comprises around 20,000 pharmacies which Farmako can supply with pharmaceutical cannabis.
“There are nearly 100,000 patients in Germany now who use medical cannabis,” said Katrin Eckmans, CEO of Farmako. “To provide their access to the necessary medicine is our primary goal. With AgraFlora we have found a strong partner: The combination of their cultivation capacities and our distribution network ensures full vertical integration and will secure the supply of pharmaceutical cannabis in the future.”
Farmako also has a licence in the UK, as well as affiliated companies in Denmark and Luxembourg, and is planning to expand into other European countries. AgraFlora is the fourth largest producer of cannabis in the world, and estimates that it will have a production capacity of 251 tonnes in 2020.
Farmako will become AgraFlora’s exclusive distributor in Germany and Europe. This will create an integrated value chain from production to distribution that guarantees the supply of high-quality cannabis to patients in Europe.
“From the beginning, the market opportunity for medical cannabis in Germany has been an integral part of AgraFlora’s global growth strategy,” said Bandon Boddy, Chairman and CEO of AgraFlora. “We have long prioritised Germany as one of the most exciting medical cannabis markets in the world given its progressive regulations; rapidly expanding patient population and insurance coverage for over 60% of prescriptions – the acquisition of Farmako confirms our thesis.”
“We have chosen the best out of various available options such as financing rounds and pure cash sale,” said Sebastian Diemer, founder of Farmako. “We consider AgraFlora’s share price to be undervalued and are convinced of a positive development. The combination of share exchange and cash gives the founders and shareholders many opportunities to further increase the sales proceeds.”