Panaxia Labs Israel says it will be exiting low-profit activities in Israel and focusing on manufacturing and exporting premium cannabis products to Europe.
The Israeli subsidiary of Panaxia Global sold its distribution and logistics operations in Israel as part of this strategy, recording a capital gain of $14.8m and an operational profit of $3.7m.
The company also reported that it saw revenues in the second quarter of the year reach $17.6 m, an increase of 19.2% in comparison to 2020.
“We have concluded the second quarter and the first half of the year with an impressive revenue growth compares to last year. It includes sales of the company’s products in Germany and Cyprus,” commented Dr Dadi Segal, CEO of Panaxia Israel.
“It is a transition period, the last line of a long-term strategic process for the expansion of European markets and the exit from secondary activities in Israel, which are not at the core of the company’s business. This process is expected to materialise significantly in the upcoming quarters. As part of the process, we have decided to exit activities in Israel, that are characterised by high competition and low profitability, and during that time, we have sold the distribution and logistics activities.
“The extensive resources we have invested in recent years have begun to bear fruits. We are expecting to start exporting medical cannabis extracts for inhalation, the only kind approved for marketing in Germany and throughout Europe.
Read more: Panaxia and Neuraxpharm to bring medical cannabis products to Poland
“This is good tidings for patients, who avoid smoking medical cannabis for various reasons. It is also a powerful growth and profitability engine, with a potential to reach a significant market share In Europe, similar to mature markets in North America. Meanwhile, we continue regulatory registration of our products in Greece, Denmark and Poland, and look forward to beginning sales of products designed for the Oncology field in partnership with the German pharma company, Axio-Novo, this year. We intend to enter any market that has a medical cannabis regulation in Europe, based on our relative advantages.”
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