Little Green Pharma ready to slide into international cannabis markets

Medicinal cannabis use is on the rise, with FreshLeaf Analytics forecasting that there’ll be more than 75,000 active patients in Australia by the end of this calendar year.

There could be more than 100,000 active patients by the end of Q1 next year alone.

And local player Little Green Pharma (ASX:LGP) was one of the first of three to nab a licence to cultivate and manufacture medicinal cannabis in Australia.

Chief operations officer Paul Long told the South-West Connect ASX Showcase last week that the company’s first mover advantage, focus on high quality medicines and supporting doctors and patients has meant it’s been able to build a significant market share.

“In Australia, we estimate we hold around about 20% of the market at the moment,” he said.

FreshLeaf graph — FreshLeaf forecasts Australian active patients to grow to 75,000 by year end.

International growth the focus

And they have the revenue to back up that claim.

In 2020, revenue was $2 million, and for 2021 financial year, revenue was $7.7 million. In the September quarter alone, revenue hit $3.2 million.

“Between 2020-2021 we had around 200 new doctors per year,” Long said.

“In the September quarter, 110 new doctors have come on board to prescribe Little Green Pharma products.

“And new patients have grown from just over 3,000 in 2020 to over 10,000.

“It does feel to us like we’re at the beginning of what is a consistent curve and a product that will be available for more and more patients in this country.”

But Long said that international growth is the focus, with the addressable market in terms of revenue projected to double in 2021 – and almost double again in 2022.

“The total addressable market for Little Big Pharma in the six markets we’re focusing on outside of Australia is $24 billion at maturity,” he said.

LGP’s total addressable market globally is estimated at ~$24 billion at maturity.

New Denmark facility a foothold in Europe

It probably helps that LGP recently snapped up a state-of-the-art 20 tonnes per annum facility in Denmark for cents on the dollar.

“The site has just over 21,000 square meters of glass to grow cannabis and a 4000 square metre good manufacturing practice (GMP) manufacturing site,” Long said.

“It’s one of the biggest medical cannabis sites within the regions in which we operate, and it was built with no expense spared.”

This – along with LGP’s three-tonne pa indoor cultivation facility in the southwest of WA – essentially gives the company security of supply for consistent product for patients.

Plus, the GMP facility is mutually recognised in Europe.

“The combined side of our cultivation gives us up to 25 tonne of biomass per annum which is a really significant volume for us to be able to grow in to, to ensure that we’ve got consistent, quality products for patients around the globe – and that is critical to our growth,” Long said.

“In comparison to a few of our Canadian competitors and the big, multi-billion dollar companies in Canada, they didn’t have that mutual recognition, so we saw a fantastic opportunity as Little Green Pharma as one of the early movers here to really focus on the European market.”

2021 market revenue forecast to double from ~$100 million in 2020

The tide is changing and LGP is ready for it

Under the special access scheme in Australia, LGP has both flower and oil products.

Long said oil became the preferred script from a doctor but in the last six months flower as a finished good has risen “to the tune of 40% of the market now”.

“We found that doctors didn’t want to be the first to prescribe a product that was different and stigmatized for 50 years, but they certainly don’t want to be the last,” he said.

“So, we’re in this really interesting spot now where a lot of doctors are transitioning across to at least trying this product for their patients.

“And Little Green Pharma have really led the way and really educated them on behalf of the industry to open up the opportunities for patients in Australia.”

And the company is confident that the future of the sector is drug registration.

“The industry is operating at the moment under a special access scheme, where patients are able to access products as a last resort if they’ve tried other medical products,” Long said.

“However, we do believe that there’s lots of research to be done, and the end result of this game will be drug registration and we have a very, very clear pathway to drug registration.”