Danish biotech DanCann Pharma has acquired CannGros, the leading distributor of medical cannabis in Denmark. Through the acquisition, Dancann obtained licenses to import and distribute medical cannabis, as well as three approved products. The acquisition is paid for through a directed issue of units. BioStock reached out to DanCann’s CEO Jeppe Krog Rasmussen, for a comment on the long-term implications of the acquisition.
DanCann Pharma is a licensed production and distribution company that focuses on discovering, developing, manufacturing, and commercialising new therapeutic cannabinoids in several diseases where today’s drugs do not provide sufficient efficacy or for which there are no treatment options.
A key component of the business is a cultivation technique developed by NASA and a development process that is adapted to the high demands that characterise the pharmaceutical industry. In April, the company’s first high-tech cultivation facility, BIOTECH PHARM1, was commissioned for the cultivation of medical cannabis. In June, the company started the first cultivation activities in the new facility.
DanCann Pharma acquires CannGros
Through the acquisition, DanCann Pharma obtained all the necessary permits for the import and distribution of medical cannabis in Denmark under the Pilot Programme. Additionally, CannGros has a pending application (extracts of cannabis in an oil solution) at the Danish Medicines Agency (DMA).
The acquisition is paid through 7 million DKK issued entirely in DanCann Pharma shares, at a price of 3.67 DKK per share, and 6 million DKK in total paid in cash on two separate occasions. The shares paid to CannGros have a lockup period of one year.
The CEO comments
BioStock reached out to Jeppe Krog Rasmussen, CEO, and founder of DanCann Pharma, for a comment on the acquisition.
To start out with Jeppe, can you briefly describe the deal, in terms of CannGros licenses, distribution agreements, pending product applications and pipeline?
– Through the acquisition of CannGros, DanCann Pharma obtains all the necessary permits for the import and distribution of medical cannabis in Denmark under the Pilot Programme. CannGros becomes a subsidiary company of DanCann Pharma, and it is DanCann Pharma’s intention to keep the brand (CannGros ApS by DanCann Pharma A/S) due to its strong representation in the market over the past four years. With the implementation of CannGros, and by obtaining necessary licenses and permit for import and distribution from the DMA in combination with CannGros established distribution structure, DanCann Pharma can accelerate and move forward its businessareas for import and distribution by an estimated 6–12 months earlier than expected.
What do you hope that this merger will lead to in the long term?
– The acquisition can really boost DanCann’s growth journey. We must keep in mind that this is an ‘early adopter’ in the extremely regulated market for medical cannabis in Denmark, and thus CannGros has a unique and very valuable ‘license to operate’, which you cannot just get your hands on. In addition to the supply chain, CannGros has built up a significant distribution network with licensed wholesalers in Denmark which puts the company in a solid market position. All of which are elements that can help accelerate growth and make a difference for patients.
Finally, a directed issue of units has been carried out to pay for the acquisition. It involved a new group of prominent investors. What can you say about these investors?
– Without saying too much, it is fair to state, that this is a prominent investor group with a wide scope and network, which in my strongest belief can be a strong contributor to further reach of the DanCann Pharma case. A natural next step for our company will be an increased focus on semi-institutional and institutional investors, who understand the sector and the industry.
The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.