THE first home-made medical cannabis products will debut on the German market within weeks.
This comes as Eurox Group – the producer of the derivatives range – has secured €3m growth capital from leading UK cannabis investors Fast Forward Innovations.
And, after securing over £10m of investment to date, Eurox has started work on its first cultivation asset in Portugal.
Speaking to BusinessCann Bernhard Babel, co-Managing Director of Eurox, said: “The final details are being sorted and the products will be launched within weeks.
Ambition To Secure 20% Of Market
“There will be a range of oils – and later we will be releasing APIs including Dronabinol.”
The oils will feature a balanced one-to-one ratio CBD to THC, a 25-to-one ratio THC to CBD and a predominant CBD oil, with more to follow in the autumn.
Its ambition is to secure between 10 to 20% of the domestic derivatives market which accounts for 50% of the total German market.
With the German market currently valued at around €200m Eurox is preparing for a period of rapid growth.
Eurox Chairman Neil Smith added: “Our ambition is to take up to 20% of the market. Our USP is ‘Made in Germany’. We are the only German derivatives company operating in cannabis, capable of doing that.
“We will be selling high-quality medicines from a high-quality jurisdiction. There is a need for more domestic products in Germany with the country over-reliant on imports.
The market is split around 50/50 between flowers and cannabis derivatives – including extracts, isolates and Dronabinol – with the overall market growing by around 30% a year.
“The market is moving to derivatives as it grows, and as the figures show it will continue to grow significantly,” added Mr Babel.
Working With Wholesalers
Prohibition Partners recently estimated the number of medical cannabis patients at around 130,000 with the majority of these being reimbursed through the state insurance programme.
With strict rules on the number of German pharmacies operated by one party – a maximum of three – Eurox is working with wholesale domestic partners and its own sales team to deliver products to the nation’s 20,000-plus pharmacies.
These partners include some of the established five major pharmaceutical distributors as well as some of the emerging handful of cannabis wholesalers and, a further 50-or-so wholesalers, looking to break into the cannabis space.
To this date Eurox has sold Bedrocan cannabis flowers into the German market, but this is restricted to around 4/5 kilos per month, per importer, by the Dutch Government, it says.
Three companies have been selected to produce domestic cannabis flowers Aurora, Tilray (formerly Aphria) and German firm Demecan with the first products set to be available by the end of the year.
Once Eurox has established its German proposition it says it will look to export to a handful of other jurisdictions including; the United Kingdom, Latin America and elsewhere in southern Europe.
Portuguese Cultivation Asset
At the moment Eurox imports flowers from producers in Canada and Spain with its oils manufactured in Bensheim, Germany.
The two senior Eurox executives also spoke at length for the first time on its new production facility in Portugal, which has secured provisional licence – or pre-licence – from INFARMED, the Portuguese National Authority of Medicines and Health Products.
Groundwork is underway on a portion of 200 hectares of land (about 400 football pitches) in Alentejo, south east of Lisbon, with the initial small-scale operation set to complete by the end of the year.
This will cultivate an initial annual harvest of around 500 kilos.
Mr Babel said: “Our strategy has always been to work with partners, but also to pursue our own licence to ensure we always have the full vertical under control.
“We have always wanted to have a cultivation asset so that we can have certainty on supply.”
Mr Smith said that as the market grows its facility affords it the flexibility to meet that demand.
“We have seen with some facilities there is a high risk of failure, but if we start small we can control this, and grow as we need to,” he said.
Eurox is in the process of selecting its cultivars based on terpene and cannabinoid profiles with the first products set to be available next year.
€3m Of New Investment
To date Eurox has been supposed by private investors to the tune of over £10m, but now feels that the financial and strategic support it will secure from Fast Forward Investments (FFWD) will help it achieve its ambitions.
FFWD’s €3m investment secures it a stake of 8.85% of Eurox with FFWD’s Vice President of Investment Analysis, Alfredo Pascual joining the Eurox supervisory board.
Mr Pascual said: “Eurox has built a strong value proposition, with the capability to develop, get manufactured and sell its own- branded, unique, ‘made in Germany’, EU-GMP medical cannabis extracts and isolates.
“As a company built from the ground up in Europe and led by a European management team, we see immense potential in Eurox to become the next vertically integrated medical cannabis leader on the continent.
“We were attracted to Eurox’s investment opportunity by a number of factors including the company’s prudent cash burn rate to date and realistic plans.
“Those plans include offering unique products across all relevant medical cannabis segments: dried flower, full-spectrum extracts and isolates.”
Eurox says the new capital will be used primarily to continue with product and business development, as well as to fund the capital expenditures related to its Portuguese cultivation asset.
FFWD’s €3m secures 4,962 shares in Eurox. Eurox had net assets as at December 31, 2020, of €1.8m and reported a preliminary loss before tax of €0.68m on pre-revenue activities for the same period.