Aphria Inc (TSE: APHA)(NYSE: APHA) announced today that they are planning on acquiring one of Germany’s leading pharmaceutical distributors.
CC Pharma GmbH, which owns over 13,000 pharmacies in Germany along with a significant market presence, would give Aphria a significant advantage in the market for their end-to-end medical cannabis operations and underlying infrastructure.
With the German market being crucial to Aphria’s overall international growth strategy, the acquisition marks a major step forward for the company once it comes through in January 2019.
“This acquisition strengthens our foothold in Germany, one of the most highly sought-after medical cannabis markets in the world. CC Pharma is cash-flow positive and has significant experience with regulatory requirements and international logistics,” said Aphria CEO Vic Neufeld. “It will be a strong addition to Aphria’s presence in Germany, providing deeper access to the important pharmacist channel and advancing our ambitious global growth strategy.”
Founded back in 1999, CC Pharma is a major distributor of EU-pharmaceuticals in the German market, grabbing over €200 million annually in revenue. Earlier in the year, subsidiary Aphria International announced a supply arrangement with CC Pharma to export close to 1,200 kilograms of medical cannabis from Canada to Germany.
“We are pleased to join forces with a premier global cannabis company, whose commitment to qualify, safety and patient care closely aligns with our own,” said Dr. Manfred Ziegler, CC Pharma Managing Director. “This is an exciting opportunity to build on our establishing network and advance our participation in a rapidly growing, emerging industry.”
Aphria’s strategy for international expansion, especially in Germany, consists of a three-tiered approach to cover supply, demand, and distribution. Another major announcement earlier this year came from subsidiary Aphria Germany, which announced a 25.1 percent acquisition in Berlin-based Schöneberg Hospital, which will start providing medical cannabis to patients seeking pain treatment.
Other Aphria-based initiatives in Germany included the construction of a state-of-the-art GMP certified cannabis vault in northern Germany, capable of storing over 5,000 kilograms of marijuana. Additionally, they are also planning a Research and Development indoor facility in Neumünster, Germany.
“We are focused on leading the way in the medical cannabis market in Germany. By combining Aphria’s expertise with Cc Pharma’s established local market presence, we are well positioned to continue on that journey,” commented Hendrik Knopp, Managing Director for Aphria Germany.
Aphria’s stock did not seem to react significantly to the news, falling 4.5 percent. The stock had previously surged, like most of the cannabis market, in response to the midterm elections and the resignation of former Attorney General Jeff Sessions. That momentum failed to continue into today’s trading session.
Aphria is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Headquartered in Leamington, Ontario – the greenhouse capital of Canada – Aphria has been setting the standard for the low-cost production of safe, clean and pure pharmaceutical-grade cannabis at scale, grown in the most natural conditions possible.
Focusing on untapped opportunities and backed by the latest technologies, Aphria is committed to bringing breakthrough innovation to the global cannabis market. The Company’s portfolio of brands is grounded in expertly researched consumer insights designed to meet the needs of every consumer segment.
Rooted in our founders’ multi-generational expertise in commercial agriculture, Aphria drives sustainable long-term shareholder value through a diversified approach to innovation, strategic partnerships and global expansion, with a presence in more than ten countries across five continents. – Aphria