LGP - Little Green Pharma

[System]

Little Green Pharma Ltd (LGP), together with its exclusive Manufacturing Partner and via its distribution arrangements, operates a vertically integrated medicinal cannabis business comprising cultivation, production, research and development, manufacturing, and distribution of medicinal cannabis products.

LGP holds all licences and permits required in Australia to cultivate, produce and sell medicinal cannabis products, and all licences to import and export medicinal cannabis products offshore. LGP's Manufacturing Partner holds all relevant licences to import and export medicinal cannabis products as well as all licences and permits to manufacture and distribute finished medicinal cannabis products for LGP.

LGP currently sells and distributes its medicinal cannabis products in Australia through Oxford Compounding Pty Ltd for patients in Western Australia and Health House International Pty Ltd for patients in other states and territories. As of October 2019, LGP products have been used by more than 1,400 patients in Australia, with over 4,500 bottles of medicinal cannabis oil sold.

LGP aims to take advantage of opportunities relating to the emerging medicinal cannabis industry in Australia and in certain international jurisdictions.

It is anticipated that LGP will list on the ASX during February 2020.

https://www.littlegreenpharma.com

 

[Dona Ferentes]

https://smallcaps.com.au/little-green-pharma-asx-listing-grow-medical-cannabis-exports/

Little Green Pharma is currently 38.1% owned by Canadian cannabis investment firm Elixxer (TSXV: ELXR). A leading company in the industry, Elixxer also has investments in Jamaica, Switzerland, Italy and Canada, and sells its partner’s branded cannabis products in a variety of formats including medicines, cosmetics, tinctures, oils and seeds. On admission to the ASX, Elixxer’s equity in Little Green Pharma is expected to dilute to 23.1%.

MD Flexa Solomon also currently holds a 26.5% interest in the company, which is expected to dilute to 14.7% on admission.

 

[Chief_Wigam]

Hey, I assume people are all set for the float on Feb 7th? One article I like: https://smallcaps.com.au/little-green-pharma-asx-listing-grow-medical-cannabis-exports/

 

[Chief_Wigam]

I expect the demand will be high.

They already had all the investment funds they needed. The IPO wasn't open to the general public. This is from the prospectus:
QUOTE
The Offer comprises:

• the Broker Firm Offer, which is open to Australian resident retail clients of Brokers who have received a firm allocation of Shares from their Broker;
• the Institutional Offer, which consists of an offer to Institutional Investors in Australia and a number of other eligible jurisdictions to apply for Shares; and
• the Chairman's List Offer, which consists of an offer to selected investors in Australia who have received an invitation from the Chairman or the Company

No general public offer will be made under the Offer.

UNQUOTE

 

[galumay]

No general public offer will be made under the Offer.

Thats a clever way to create FOMO!

I dont doubt it will attract plenty of punters buying into the pot narrative.

 

[Chief_Wigam]

They only needed about 6mil to build a factory and their pre-float investors pumped in more than that.

I would think that as they are the only GMP certified co. out there, with a recognised Leadership team and Academics from University as advisors, they will be differentiated from other companies in this space.

 

[galumay]

Its still a crap sector, its an cyclical agricultural commodity play. The whole pot narrative is completely disconnected from business fundamentals. May as well buy bitcoin or lithium companies.

 

[Chief_Wigam]

I would beg to differ. Motely Fool has this to say about the sector:

On Tuesday, Nov. 6, Michigan became the 10th state in America to legalize recreational marijuana... and the very first Midwestern state.

Additionally, Missouri and Utah both legalized medical marijuana use. If you're keeping track, that's now 33 of 50 states with some form of decriminalized marijuana.

Now, why am I taking time out of your day to tell you about this?

Because I believe these three states are ushering us one step closer to an unprecedented boom in the cannabis market.

Frankly, I don't care about cannabis itself... but I sure do care about massive opportunities for forward-thinking investors... which is EXACTLY what I see here.

Here's what I'm talking about. Financial experts from all over the world agree: a marijuana boom is coming.

To the tune of an estimated $80 billion.

And here at The Motley Fool, we've identified a little-known Canadian company that might have just unlocked the key to profiting off marijuana.

The state of cannabis

Cannabis legalization is sweeping over North America:

• 9 U.S. states plus Washington, D.C. legalized recreational marijuana in recent years
• Full legalization in Canada as of Oct. 17th
• Michigan, Missouri, and Utah all pass marijuana referendums in 2018 midterms
• Legal cannabis worth $50 billion in the U.S. today

And since some experts have projected the American industry to skyrocket to as much as $80 billion by 2026, I think it's time for investors to start paying attention.

But until recently, it's also an industry that we've stayed on the fence about. it's a relatively new field... untested... unproven.

And while The Motley Fool analysts love being on the cutting-edge of new investing trends...

...like picking Amazon at $15.31 a share...

...Netflix at $1.85 a share...

...or Disney at $1.84 a share...

...we've been quiet on this growing marijuana industry for a while.

Until now.

Because a game-changing deal just went down between the Ontario government and a powerhouse Canadian company.

And that company - which now has the opportunity to rake in profits from the $7 billion Canadian cannabis industry AND potentially the $80 billion US cannabis industry - is no stranger to us here at The Motley Fool.

Because we've actually recommended this company before... for completely different reasons! And take a look at how it's done since we recommended it to our members in July 2016:

• 1,402% returns since
• 52% sales growth in last year alone
• Estimated 98% of addressable market left to conquer

This small Canadian powerhouse has locked in key partnerships with behemoths like Facebook, Amazon, and now the Ontario government.

And even with all that, the company's CEO declared that he thinks they're only 2-3% into what this company could eventually become.

We here at The Motley Fool are convinced we're only in the VERY early days of this company's trajectory.

Which means there could still be boatloads more profit to be had for in-the-know investors who are prepared to take action.

Now, I don't like to brag... but here at The Motley Fool, we've had a pretty good track record of picking trends before they get big. Take a look at a few of the companies we picked to dominate their field:

• Netflix, up 15,718%
• Amazon, up 13,288%
• Bookings Holdings, up 7,764%
• Walt Disney, up 7,910%

If you'd invested $1,000 in each of those companies when we recommended them in Stock Advisor, you'd be sitting on $450,797 right now.

Which brings me back to this latest find.

This company's future doesn't hinge on marijuana. If all forms of THC are banned forever in the United States, we think this company still has an incredible field of opportunity. (Heck, that's why we recommended it in the first place!)

But now that there's an estimated $80 billion industry emerging from the woodwork, their prospects are positively mouth-watering - and we think you'll regret not getting invested now.

Because now there's the potential for even more capitalization for this small company. And if you're not invested, you may come to regret it.

Forget penny pot stocks.

Forget untried, inexperienced cannabis farmers.

THIS is the company we think you should have in your portfolio if you want to position yourself wisely for the coming marijuana boom.

And even though this company has had unprecedented success so far... and they've just made a history-defining deal with the Canadian government... far fewer investors than you might expect are taking advantage of this VERY rare moment.

Due to the urgency of this recent development, we put together a thorough report that shows you how this emerging industry could potentially mint its own "marijuana millionaires".

It reveals the reasons why we think every forward-thinking investor should be paying close attention to this revolutionary new industry and what might be a potentially life-changing investment opportunity.

Best of all, this report is FREE to you when you sign up for Stock Advisor today.

Simply click below to learn about the one stock we think you need to consider for your portfolio for the coming cannabis boom.

 

[galumay]

If you think MF's are the path to successful investing, then no doubt you will fall for the pot fomo too.

Have a read of the tripe you have copy and pasted and try to do some second level thinking about what the agenda actually is.

Go and have a deeper look at the thousands of companies that MF have recommended over the years and see the proportion of them that have disappeared, gone bankrupt or at best are trading below the price MF had them as a buy.

This sort of nonsense belongs on Hot Copper and its disappointing to see it pushed here.

 

[Chief_Wigam]

You're welcome.

 

[Chief_Wigam]

A diamond in the rough. Congrats on those who managed to buy yesterday. A great run company with top leadership team, attractive MC. Buying at float price is still a bargain, based on the fact the IPO was oversubscribed

 

[Dona Ferentes]

There's an article in today's AFR titled
Would you buy shares from an Instagram model. There's a mention of this company, among many, and the efforts to get companies to market at IPO.

The fees for floating small companies can be as high as 10 per cent. For a big stock, a broker will normally charge around 3 per cent. In return for big fees, smaller brokers are prepared to take bigger risks with less-established clients. If everything goes well, everyone makes money: the founders, managers, bankers and investors. When they don't, the bankers still get paid, and shareholders can be left with worthless stock...

LGP didn't do too well, and I suspect the serial poster is less attractive than the model (she's blonde)(loves puppies, tattoos and sunshine).

https://www.afr.com/companies/profe...hares-from-an-instagram-model-20200219-p5427f

On Thursday, another medical-cannabis stock floated – and crashed. Little Green Pharma set aside 10 per cent of the $10 million IPO funds for Canaccord Genuity, its stockbroker, and other advisers. The stock fell 27 per cent on the first day, then rebounded on Friday.

 

[Chief_Wigam]

I find it baffling that LGP can be valued by the market lower than AusCann (AC8). Here is my quick look comparison between the two. Am I missing something? Seems to me LGP is undervalued.
LGP v AusCann

Market Cap
$51m v $73m

2H 2020 Revenue
$716k v zero

Growth rate
20% per month v zero

2H 2020 Burn Rate
$4.1m v $3.4m

Products in Market
4 v 0

Cash on Hand
~$10m v $26m

Production Capacity and Timing
LGP: 110,000 bottles or 1750kg of dried flower per annum to commence in 2Q 2020. Current capacity is ~200-250kg / annum??
AusCann: none - all outsourced

Breakeven expectations
3Q 2020 v no timeline given

 

[Chief_Wigam]

Well the market caps of each are about the same now, with LGP going up relative to AC8 and I can see the trend continuing in the same way for the foreseeable future

 

[tinhat]

I bought some LGP recently. I don't think this company falls into the pot stock speculative bubble. It's been a capital light, debt free start up and float. That said, the market cap of $75m for a business which is growing sales from a miniscule scale, whether you consider it high or low depends on what you decide the potential is for this business in a very new industry and whether you think this management can crack it.

A couple of points to consider:
- They are focusing on Aussie and European markets as North American market is already covered,
- They are focusing on the pharmaceutical grade, prescription grade (dosable) medicinal cannabinoids,
- They are integrated and in control of cultivation, processing and distribution'
- They are focused on researching and developing delivery innovation*

They have EU certification as a pharmaceutical producer and are working hard at gaining first mover advantage through European pharmaceutical channels.

* It seems to me that the current standard delivery method of cannabinoid oil (they have four formulations) via a reusable syringe and their current packaging is a bit simple and clumsy for patients to handle. Innovation in packaging and delivery method is needed in my opinion.

Small and micro caps in the biotech seems to gaining a lot of interest.

My recent posts on these fora show that I am a fan of the Share Cafe Hidden Gems webinar series.LGP presented last Friday:

https://www.sharecafe.com.au/2020/0...sharecafe-hidden-gems-webinar-presentation-2/

 

[Chief_Wigam]

I personally think a catalyst for demand may come from any number of directions. For example COVD-19: https://www.forbes.com/sites/emilye...mmation-researchers-explain-why/#1e509e0e4d9d

What I like about the potential buying at around these price levels is that none of any new market potentials, known or unknown ares factored into current the share price. They have enablers like their work on technology that will allow them to adapt and be nimble to such opportunities.

It's important to remember that what they did and what their competitors didn't do, is not overcapitalising until supply path ways were established overseas. But locally, this already provides enough immediate cash flow to avoid future capital raisings for the foreseeable future. So a good reliable baseline to allow them to grow from here. Really must congratulate the team at LGP for what they've done so far.

 

[peter2]

While all the carousing is being done on the VML thread I've ducked out and snaffled some LGP. Price looks like it wants to bounce off a double bottom (0.60).

LGP seems to be the best cannabis performer on the ASX (only one going up).

They're getting increasing follow up orders from their German partner. LGP production facilities are now in full operation. There is now an urgency to increase their production capacity. I feel a cap raise is imminent.

 

[frugal.rock]

While all the carousing is being done on the VML thread I've ducked out and snaffled some LGP.

Off buying pot instead of joining the throng eh? ? Sneaky.

I remember @tinhat also liked and held this one and he does his homework too.

The over the counter scenario should see a bit of heat coming back into Aussie pot stocks as we head towards 1/7/2021 which is when we can legally buy some CBD products at pharmacies without a prescription.

 

[barney]

While all the carousing is being done on the VML thread

I know not of what thou speak Sir Peter No.2

Just a few of the boys hoping the Vital Moon Light will continue to rise

(Please note that all alcohol must be consumed before participating in the fence-sit, lest thine bottom falleth and hitteth the ground with velocity)

 

[peter2]

They're getting increasing follow up orders from their German partner. LGP production facilities are now in full operation. There is now an urgency to increase their production capacity. I feel a cap raise is imminent.

Nailed it. LGP has announced that they've raised capital to buy an existing cannabis production facility in Denmark.

This increases LGP's production from 3 tonnes pa to 23 tonnes pa.