Cann Group has signed a deal to buy UK-based health and wellness company Satipharm from Canada-based Harvest One Cannabis for a maximum consideration of CAD$4 million.
Satipharm holds the exclusive licence to develop and market the proprietary Gelpell delivery system for cannabinoids.
Cann CEO Peter Crock said the Gelpell capsules produce better results than other cannabinoid delivery systems, enabling “more targeted and effective dosage” of CBD and differentiated THC prescription formulations.
“The Satipharm product offers superior efficacy, delivery and stability qualities compared to other products and we expect these unique features, coupled with its presentation in a more familiar capsule of pharmaceuticals, to generate greater confidence from prescribing doctors,” he added.
Under the agreement, Cann will assume the rights to proprietary and differentiated cannabinoid delivery technology and gain immediate entry into the CBD market in the UK, Ireland and Eastern Europe.
It also picks up the intellectual property, marketing and distribution rights as well as exclusive manufacturing rights of hemp-based products and manufacturing arrangements for the exclusive supply of CBD products manufactured by Gelpell AG to Satipharm.
Cann will separately buy manufacturing equipment from Gelpell AG to enable the manufacture of Gelpell products.
Once the acquisition is complete, Cann will seek TGA approval to manufacture THC and THC:CBD balanced Gelpell products in Australia
“The Satipharm acquisition provides an opportunity to accelerate both short-term and longer-term revenues,” said Crock.
“Over time, we believe we can expand the number of markets into which these products are sold and expand the range of formulations to be targeted at both the over the counter and prescription segments.”
Meanwhile, Cann told the ASX it will make A$5 to $7 million less than the $15 million in full-year revenue it had signalled three months ago.
The company said COVID-19-related regulatory delays in Australia and Germany meant it would likely recognise revenue forecast from a large order of full-spectrum cannabis oil to its German distribution partner in the first half of FY2022, rather than this financial year.
As a result, Cann forecast revenue of $8 million to $10 million, rather than the $15 million predicted at the company’s November AGM.
“While the lengthy regulatory delays are frustrating, we believe this is a timing issue only and the fundamentals of the business have not changed,” Crock said.
Last week, Cann announced it had lost $3.6 million in a “complex and sophisticated cyber fraud”.
The company is currently in a trading halt until the start of trading on Thursday (February 18) or earlier pending an announcement to the market.