GROW Group told BusinessCann back in 2020 that it was raising £6m in capital to fund its expansion across Europe, setting its sights on the German medical cannabis opportunity.
Nearly two years later and the company has now received its first orders from pharmacies for its branded prescription extracts in Germany, following a tie-up with native distributor Nimbus Health.
While its CEO Ben Langley believes his new partner’s recent Big Pharma buyout is ‘promising for the sector’, Grow continues to set its sights firmly on organic growth across its three core entities, Grow Pharma, Grow Biotech, and Grow Trading.
With operations now in place across the UK, Spain and Germany, the company says it could finally ‘press the button’ on an IPO within the next 12 months.
German Expansion
Since its inception in 2017, the same year Germany legalised cannabis for medical use, Grow has reportedly been planning an expansion into the market.
While the UK’s decision to follow Germany’s footsteps in legalising medical cannabis a year later tempered the company’s original expansion goals, it announced on March 18 2022 that it has officially launched in Germany.
Unlike its operations in the UK which largely focus on ‘distribution for a broad range of cannabis companies’, Grow intends to focus its efforts in Germany on launching its own branded products to the medical market, through Nimbus Health.
Nimbus, a pharmaceutical wholesaler and manufacturer, said it had already received orders for Grow’s initial trademark medical cannabis product, an oral medicine with a cannabinoid ratio of THC10:CBD15 which is being prescribed for a range of symptoms including chronic pain, spasticity, anorexia and chemotherapy-induced nausea.
Grow’s CEO of German operations Susan Noesbusch told BusinessCann: “We’re focused more on the Grow brand here, so launching the medical cannabis extracts, as well as flower with our partner company Nimbus Health who is our distributor here.
“We will focus a lot on scientific projects, research and development, towards improving patient quality of life and work towards getting a lot of patient reported outcome observational data.”
She explained that the company had been building its logistical and administrative operations in the country throughout last year, but moved into its ‘scientific launch’ in March, seeing it work with physicians to get a good set of evidence for its products.
“So we’re launching now and will be expanding our portfolio over the next five to six months.”
European Opportunity
Its burgeoning position in Germany will also be bolstered by Grow’s recently acquired operations in Spain, following the acquisition of Sanoid Isoslates’s eight-hectare cultivation, production and extraction facility.
Mr Langley told BusinessCann this will ‘really empower us in terms of making sure we can get well priced, high quality cannabis medicines reliably to patients’ across the EU.
In turn, these ventures into mainland Europe will be supported by its UK business, which Mr Langley says is ‘now profitable’, alongside its R&D operations which are understood to be ‘very near commercialisation’, with initial revenues expected ‘in the next couple of months’.
With an established supply chain into the market through Nimbus, alongside an EU production facility capable of producing bulk ‘low-cost pharmaceutical grade API’, Grow would be well positioned to follow a number of its medically focused peers into the upcoming German adult-use market.
However, a transition into the recreational space is reportedly not on Grow’s radar.
“We think our mission is very specific, it isn’t rec and isn’t wellness, our mission is to treat patients with prescribed medicines, so that’s what we are doing”.
Ms Noesbusch added that although there were currently no plans to target the recreational market, it was ‘good news’ for the company, brushing aside concerns it could cannibalise the medical space.
“I think the good news about recreational coming is that it shows this is a coalition Government that is definitely behind medical cannabis,” she explained.
“This government has confirmed in many places that protecting what medical cannabis is today and making sure that it continues down a scientific path to improve outcomes for patients is still a priority.
“I think in the next two years the government will be more supportive of medical cannabis making access that much easier for patients.”
IPO
To fund its ambitions of becoming the provider of the ‘broadest portfolio of quality cannabis medicines’ to patients across the globe, Grow launched what it described as Europe’s largest-ever medical cannabis crowdfund just days after announcing the acquisition of Sanoid.
The group managed to raise £3.4m via crowdfunding platform Seedrs, £3.2m of which was raised in the campaign’s first hour.
Despite the runaway success of its campaign, Grow scrapped the crowdfund before accepting any cash, and never closed through Seedrs.
According to Mr Langley, this was due to ‘certain terms that Seedrs asked us to agree to that we didn’t feel were commercially viable for our existing shareholders’, adding that he was not aware of these issues when he started the campaign.
However, the highly publicised campaign reportedly succeeded in raising Grow’s profile, and enabled ‘most’ of those investors to invest in the company ‘bilaterally’ seeing the company raise most of the funds it needed.
To fund its future endeavours, the company is understood to be poised to go public, and has reportedly ‘been talking with advisors for well over a year’.
Over the past year there have been ‘a number of times’ where Grow came close to ‘pressing the button’ on an IPO but a number of complications, including its integration of Grow Iberia (formerly Sanoid), have prevented it.
“The thing that we’re saying to our shareholders privately, which is consistent with what we’re saying externally, is we do want to be listed, we think it’s a good way to fuel our business, and we will do so as soon as it’s sensible.”
With Cannabis stocks continuing to struggle across the board, and external factors such as the war in Ukraine, COVID supply chain issues and the living cost crisis, it is unclear when this could be.
“I feel like that is likely to be within the next 12 months. We continue to watch this space prudently. We’re not just gonna jump into it blindly.”
While Mr Langley says the AIM market, which recently saw its UK peer Celadon launch a successful IPO, has ‘been the preference’, Akanda’s recent success on the NASDAQ was something Grow has ‘noticed with great interest’.
