Kanabo Group PLC (LON: KNB) shares barely moved after its partner Materia Malta Operating Ltd started distributing its medical cannabis products in the European Union.
Kanabo is acquiring Meteria Malta, and the two companies have signed a ‘Head of Terms’ agreement, which marks a crucial step in the acquisition process.
The first product being marketed by Matera Malta is known as “Carbasi Verde” and has a potency of 21.7% THC. The product marks the completion of the first production cycle by Materia Malta.
The medical cannabis company revealed that Crbasi Verde is a medical cannabis flower produced at Materia’s EU GMP certified manufacturing site in Malta.
Materia is planning to ship more products to the UK and Germany. The product has been registered under the narcotics license held by its German subsidiary Materia Deutschland GmbH head of the import into the country.
Kanabo intends to acquire the entire European business of 11157353 Canada Corp, which trades under the Materia brand. The transaction will include acquiring Materia’s Maltese EU GMP certified facility, its UK CBD e-commerce platform, and its German medical cannabis wholesaler.
Investors appeared unimpressed by the news. The lack of movement in Kanabo’s share price may be because the company has yet to acquire Materai’s businesses. In addition, the transaction could fall through since it requires regulatory approvals.
Nick Pateras, Materia’s Europe Managing Director, said: “This journey began in earnest over two years ago, so we’re elated to be offering patients Materia manufactured and branded medical cannabis. Our Maltese site is truly state-of-the-art, and with our team’s deep pharmaceuticals expertise, we’re confident that Materia Malta will become one of the most important production facilities in Europe’s cannabis supply chain.”
Avihu Tamir, Kanabo Group Plc’s CEO, added: “Materia’s pace of progress remains remarkable. Subject to completion of the merger, the facility in Malta will enable Kanabo’s enlarged group to broaden its distribution across Europe and solidify our plan for a complete supply and distribution line.”
Kanabo’s shares seem pretty attractive given the medical cannabis company’s positive prospects. I would buy the shares at current prices, but this would be a long term position.
*This is not investment advice. Always do your due diligence before making investment decisions.
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