UK's Kanabo to buy Canadian cannabis producer Materia
July 26 (Reuters) - Kanabo Group Plc KNB.L said on Monday it would buy Canada-based cannabis producer and distributor Materia for an undisclosed sum, sending shares in the London-listed medical marijuana firm up 8%.
The deal gives Kanabo an entry into the German market, the largest for medical cannabis in Europe, where industry research group Brightfield estimates sales to exceed $2 billion by 2025.
Kanabo Chief Executive Officer Avihu Tamir said he expects the merger to result in the largest public cannabis company in the UK and the European Union (EU), where Materia recently won a certification for its 34,000 sq ft Malta facility.
Founded in 2018 by pharmaceutical and cannabis industry veterans, Materia's main focus has been on Germany, with executives calling it "market number one, two and three" in May.
"We believe that our combined infrastructure will generate significant value for our shareholders, partners, customers and patients," Materia CEO Deepak Anand said in a statement.
Kanabo said it plans to complete the Materia deal through two all-stock payments, one of which includes Materia reaching certain milestones such as C$30 million ($23.85 million) sales in two years and its Maltese facility breaking even.
($1 = 1.2580 Canadian dollars)
European medical marijuana sales set to risehttps://tmsnrt.rs/3x4QVte
(Reporting by Shariq Khan in Bengaluru; Editing by Ramakrishnan M.)
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