ASX-listed ‘farm to pharma’ cannabis producer THC Global has acquired Australian medicinal cannabis clinic network Tetra Health in a cash-plus-shares deal that gives it access to more than 10,000 potential new patients.
Tetra boasts a network of more than 600 referring and prescribing doctors, a national group of dispensing pharmacies as well as 1,100 active and 10,000 potential patients. It makes money from patient consultation fees and selling anonymised case study data.
According to THC Global it is cashflow break-even at present, with an expectation that it will turn a profit in 2020 as patient numbers increase.
The deal, which is expected to be completed around May 25, will see the companies combine in a bid to rapidly increase the number of patients using legal medicinal cannabis in Australia by simplifying doctor consultations and increasing access to THC Global products.
However, THC Global insisted Tetra will remain a product-agnostic solution for patients and doctors accessing medicinal cannabis under the Australian regulatory scheme, with doctors in its network continuing to prescribe products from other suppliers such as Althea and Little Green Pharma.
According to its release to the ASX: “Through the acquisition of Tetra, THC Global is advancing the industry across the chain, enabling the company to increase accessibility and reduce the cost of medicinal cannabis to Australian patients by cutting out intermediary mark ups and handling costs.”
It added Tetra’s exclusive agreement with a national private hospital group to provide access to its medicinal cannabis services gives it a potential addressable patient population of more than 20,000 annually.
THC Global CEO Ken Charteris signalled the move could also lead to further expansion in the region. He said: “Through this acquisition, we will be able to rapidly increase the number of Australian patients who can access cannabis. Going forward, we will look to further broaden the current network and potentially expand across the Tasman and other regions.”
The deal is worth $2.5 million in THC Global shares and $500,000 cash to Tetra’s current owner Metra Holdings Pty Ltd and will be paid over six months post-completion.