IMCC - IMCC Addresses Accelerated Growth in Germany Through new Supply Agreement with EU-GMP Certified Glasshouse Botanics and Announces a Change to its Board of Directors | Benzinga
IMC Germany's accelerated growth potential leans strongly on its supply strategy through its ability to partner with cannabis growers for EU-GMP certification, bolstering the company's supply chain with exclusive product
TORONTO and GLIL YAM, Israel, June 5, 2024 /PRNewswire/ -- IM Cannabis Corp. (CSE:IMCC) (NASDAQ:IMCC) (the "Company," "IMCannabis," or "IMC"), a leading medical cannabis company with operations in Israel and Germany, is experiencing accelerated growth in Germany after the April 1st partial legalization, further to the Company's press release dated March 25, 2024. Adjupharm GmbH's, IMC's German subsidiary ("Adjupharm" or "IMC Germany"), is supporting its growth by further bolstering its supply chain with an additional EU-GMP supplier, GlassHouse Botanics Inc. ("GlassHouse Botanics"), headquartered in Whitewater, Ontario.
The April 1st partial legalization of cannabis in Germany, has potentially paved the way for tremendous category growth. With a population of over 83 million, Germany has more than double the population of California, which had a cannabis industry of about $5 billion in 2023.[1] Until the social clubs are up and running, the only legal way to buy cannabis in Germany is with a prescription, driving significant growth in the Medical Market.
"While is impossible to say how big the opportunity in Germany will be, if we assume a 1% penetration and an average spend of $200/month, the German market could have a potential run rate of approximately $2 billion by the end of 2025," pointed out Oren Shuster, CEO of IMC.
IMC Germany spent 2023 preparing for the legalization by putting the processes in place to drive accelerated growth, while focusing on active cost management with the goal of achieving sustainable profitability. In 2023, IMC Germany delivered +182% growth, outperforming the market by 162%, closing the year as a strong #6 among the cannabis distributors and ranked #1 in sales per SKU[2].
"I am extremely proud of the work the team did in 2023, our singular focus built the foundation we are now using to drive accelerated growth," said Richard Balla, CEO of IMC Germany. "Since the April 1st legalization, we immediately started to see an increase in the demand. Our sales from April through the end of May have increased by over 160% versus the average sales of the last six months before legalization. The medical cannabis market clearly is evolving; however, it is too early to assess the mid to long term effect. What has become clear though, is the importance of a consistent, reliable supply chain. It needs to be able to match the pace of the rapidly growing market."
All cannabis flowers that are sold through pharmacies must come from an EU-GMP facility. Of all the licensed Canadian cannabis producers, fewer than 20 are EU-GMP certified[3], making this one of the primary supply chain bottle necks, limiting the ability of German medical cannabis distributors to import product from Canada. IMC Germany is able to build a more robust, exclusive supply chain by having the necessary certifications and qualified personnel to preform EU-GMP 3rd country inspections for qualified cannabis producers. GlassHouse Botanics is a privately held Canadian corporation in the business of cultivating and processing pharmaceutical-grade medical cannabis flower. Through their partnership with IMC Germany, they received their EU-GMP certification.
"One of our key objectives is to make sure that our supply chain is strong enough to meet the demand," commented Oren Shuster. "Our ability to perform EU-GMP 3rd country inspections for licensed cannabis growers is a fundamental part of the strategy. We are ...