Akanda Books €1.8M of Revenue in Q4 2022 As German Sales Start
FRANKFURT, Germany & LONDON, February 02, 2023--(BUSINESS WIRE)--International medical cannabis company Akanda Corp. ("Akanda" or the "Company") (NASDAQ: AKAN, WKN: A3DG83) today announced that it successfully launched its initial supply to German customers recognizing approximately €1,803,996M 1 in sales of EU GMP high-quality indoor-grown medical cannabis in the last quarter of 2022. On a preliminary, unaudited basis, Akanda has recognized its first material revenues since its inception, validating the Company’s strategy to enter the European markets supplying high-end indoor-grown cannabis. These revenues result from only two full months of sales, with the indoor facility shipping only an estimated 40% of the facility's capacity. The Company prepares for the expansion of its indoor cultivation capabilities at its Holigen facility after receiving test results for the highest percentage of THC potency in any cannabis product to be sold within Germany and forecasts sales to double over the next six months.
According to the preliminary, unaudited financials from Q4 2022, the Company has recognized gross revenues of EUR 1,803,996M with EBITDA of €472K and an EBITDA margin of 16.5% on only two months of sales and three months of fixed costs. Q4 revenues increased as a result of cannabis sales produced by Akanda’s wholly-owned subsidiary in Portugal, Holigen Limited ("Holigen"), which implements sophisticated processes to avoid weakening terpenes and product potency. Akanda’s premium cannabis products have tested at 29.2% THC and are the highest THC percentage products to be released and sold in the German medical cannabis market. The Company has received many positive reviews on German WeedMaps for its premium T24 and T27 cannabis products, which have been sold under third-party brand names. The Company has over 800 kg of freshly cultivated cannabis ready for pending medical sales expected in Q2 and Q3.
In addition, as demand for medical cannabis in the EU increases, the Company plans to expand its overall indoor EUGMP cultivation capacity at its Holigen facility by increasing the number of grow rooms in its facility in Sintra, near Lisbon, Portugal. Holigen has been successfully operating a 20,000-square-foot facility, and the expansion plan is expected to allow the facility to perform at an increased capacity.
The Company expects that these sales volumes will increase throughout 2023 based on the following:
Initial sales exceeding the Company’s original internal projections,
Current existing inventory on hand,
Planned increases in cultivation production, and
Expansion into the UK market.
Furthermore, the Company’s German distribution partner recently launched its new Pharmacy Partnership Program2, designed to improve and support visibility and expertise to expand in the German medical cannabis market. The distributor offers a comprehensive product range in which Holigen-supplied high-quality medical-grade cannabis is made available.
"The management team is thrilled to recognize our first significant revenue that is above our initial projections as we continue to see the German cannabis market expand. With highly profitable sales of our high-THC, untreated medical cannabis in Germany, we are assessing strategic alternatives, including increasing our capacity, expanding our licensing deal with Cookies, and selling our Portuguese business. The Holigen operations are strategically positioned to produce on a large-scale, high-quality indoor cannabis, some of the finest in Germany, in preparation for sales expansion with the German and UK markets," states Harvinder Singh, Chairman at Akanda Corp. "Our vision is to be a pioneer in the European cannabis markets, utilizing our valuable global expertise in cutting-edge cannabis cultivation processes."
Germany represents the largest and most profitable medical cannabis market in Europe. An estimated 300,000 patients receive medical cannabis in Germany annually. Although the German medical cannabis market is still maturing, Germany is expected to lead the European cannabis market in growth. It is predicted that over a million German patients will have access to medical cannabis by 2024 and that the German medical market alone will be worth €7.7 billion by 2028.3
If Germany passes legislation to legalize cannabis, it has been estimated that the German cannabis market could explode quickly, increasing its worth to $4.6 billion per year.4 If recreational cannabis could be purchased online, it would increase market share for the legal cannabis market as consumers using cannabis for non-medical use are currently reverting to black market sales.5
About Akanda Corp.
Akanda is an international medical cannabis and wellness platform company seeking to help people lead better lives through improved access to high-quality products. Akanda’s portfolio includes Holigen, a Portugal-based cultivator, manufacturer, and distributor with a prized EU GMP certified indoor grow facility; CanMart, a UK-based fully licensed pharmaceutical importer and distributor that supplies pharmacies and clinics within the UK; and Bophelo Bioscience & Wellness, a GACP qualified cultivation campus in the Kingdom of Lesotho in Southern Africa, which is currently in liquidation. The Company’s seed-to-patient supply chain also includes partnerships with California-based Cookies, the most globally recognized cannabis company in the world, and Cansativa Group, a leading importer and distributor of medical cannabis in Europe. Learn more at www.akandacorp.com and follow us on Twitter, Instagram, LinkedIN and Facebook.
Cautionary Note Regarding Forward-Looking Information and Statements
This press release contains certain "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only Akanda's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of Akanda's control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or may contain statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "will continue", "will occur" or "will be achieved". Forward-looking information may relate to anticipated events or results including, but not limited to the Company’s strategy to enter the European markets; entry into the UK market; expansion of it indoor cultivation capabilities at its Holigen facility; consistency regarding THC potency in the Company’s cannabis products; future sales of existing cannabis; the expected increase in sales volumes based on further expansion, cultivation, inventory and sales; the Pharmacy Partnership Program and expansion in the German medical cannabis market; expansion of the licensing deal with Cookies; the ability of the Company to execute its business plan; the continued growth of the medical cannabis market in the countries in which the Company operates or intends to operate; the capacity and quality attributes of the Company's products to support growth in European markets; the sale of the Company’s business in Portugal; the liquidation of the Lesotho campus; and the Company’s business strategy, product development and consistency, and sales and growth plans. The forward-looking information and forward-looking statements contained in this press release are made as of the date of this press release, and Akanda does not undertake to update any forward-looking information and/or forward-looking statements that are contained or referenced herein, except by applicable securities laws.
1 Preliminary numbers as of unaudited financials as of January 30, 2023.
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