Candian-based Halo Labs Inc. (NEO: HALO) (OTC: AGEEF) last week completed its acquisition of U.K. based cannabis distributor, Canmart Ltd, one of the few distribution platforms for cannabis-based products for medicinal use (CBMPs) in the UK. The deal provides Halo Labs with a strong position to take advantage of the rapidly growing UK market for medical cannabis.
Through the acquisition Halo has acquired 100 per cent of Canmart’s issued and outstanding common shares from the shareholders of Canmart, which provides the company with all the licenses needed to import and wholesale CBMPs in the U.K.
Halo is a leading, vertically-integrated cannabis company that cultivates, extracts, manufactures and distributes quality cannabis flower, oils, and concentrates, and has sold approximately six million grams of oils and concentrates since inception.
In 2018, Canmart was one of the first movers to anticipate the growing legalization of medical cannabis in the U.K. With expertise in cannabis education, storage and distribution, Canmart holds all relevant licenses to attain bulk importation, as well as store and distribute CBPMs. Canmart possesses the necessary logistics expertise, storage facilities, solid pharmaceutical and healthcare relationships in order to meet the country’s growing patient base and demand for medical cannabis products.
In a 2019 study, the International Energy Association reported 255 tons of cannabis were sold in the U.K. at a cost of £2.6 billion (CAD$3.4 billion) to three million consumers1. A 2019 publication by Dr. Daniel Couch of the Centre for Medical Cannabis estimated that each year 1.4 million U.K. citizens self-medicate with cannabis illegally.2 It is thus understandable why experts predict as a result of loosening restrictions by 2024, that the legal U.K. medical cannabis market has the potential to reach 400,000 active patients and £1 billion ($1.3 billion) in value. Factoring affordability and easier access, and up to 52 treatable conditions, leading market intelligence firm, Prohibition Partners3, estimates that the total patient base for medical cannabis use in the U.K. could reach four million during the same time period.
“We are so enthusiastic about the acquisition of Canmart and our growth plan for the United Kingdom,” Co-Founder and Chief Executive Officer of Halo Labs, Kiran Sidhu said. “Since the attainment of our cultivation site operated by Bophelo Bioscience & Wellness in Lesotho, South Africa, we’ve been able to achieve the cultivation and distribution of high-quality cannabis, derived from exclusive, proprietary genetics under license from OG DNA Genetics. The closing of the Canmart acquisition will allow us to further expand our reach of medicinal cannabis to patients looking for individualized treatment in the United Kingdom and create new international avenues for distribution while raising Halo’s gross margin.”
Halo expects the cultivation and manufacturing operations of Bophelo Bioscience & Wellness (Pty) Ltd. combined with the importation and distribution capabilities of Canmart to drive growth of a well-positioned business to serve the U.K. market.
Initially, cannabis produced by Bophelo is planned to route through Medcan in Malta, where the flower will be manufactured into CBPMs, imported into the UK, and distributed by Canmart to pharmacies and clinics that serve qualified patients.
Furthermore, with cultivation operations currently underway at the Bophelo site, Canmart will be positioned to wholesale products deriving from notable genetics- DNA Genetics and Zkittlez™. Through Halo’s vertically integrated global supply chain, U.K. patients will have access to these high-quality, proprietary, branded flower and oil products.
As the need for medicinal cannabis arises, technological advancements play an integral role in disseminating information about cannabis products to the consumer. Earlier this fall, Halo announced the roll-out of “Cannafeels” – an easy-to-use, online application featuring content that supports patients and consumers as they research cannabis strains on their computers, tablets, and smartphones. Through the App, patients and consumers will be able to access this strain-related content before, during, or after visits to clinics and dispensaries to help them understand how different strains address a range of health issues; and the effect to which psychological and bodily benefits have on its users. This will differentiate Canmart’s products from other distributors in the U.K. and is expected to increase Canmart’s market share of CBPMs.
Andreas Met, Co-Founder of Halo and Head of International Operations, comments: “Closing this acquisition is exciting because the U.K.’s cannabis market is projected to be larger than Germany by 2024—and potentially could be the largest single medical cannabis market in the world. This Acquisition—fuelled by our Lesotho growing operations—positions Halo to grow rapidly in the U.K. market, a key component of our international growth plan. In 2021, we plan to import product grown at Bophelo to the U.K.“.
Source | Halo Labs