IM Cannabis Corp. is experiencing accelerated growth in Germany after the April 1st partial legalization. Adjupharm GmbH's, IMC's German subsidiary, is supporting its growth by further bolstering its supply chain with an additional EU-GMP supplier, GlassHouse Botanics Inc., 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. 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.
"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, 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 perform 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 delighted to have exclusively launched GlassHouse Botanics' first strain and have already started the EU-GMP audit process with additional licensed growers, further supporting our supply strategy."
"GlassHouse Botanics was built on the premise to create a highly efficient, state-of-the-art facility, custom-made for EU-GMP certification," said Jeff Black, CEO and Founder of GlassHouse Botanics. "Through our EU-GMP certification, we can now focus on ramping up production to supply the growing demand in the German medical cannabis market."
Change to Board of Directors
In addition, IMC announced that Marc Lustig will be stepping down as director of the Company and as Chairman of the Board of Directors, effective immediately.
The Board of Directors has appointed Oren Shuster, currently a director and CEO of IMC, as the new Chairman of the Board of Directors of IMC.
"The Board of Directors would like to thank Marc for his steadfast dedication and contributions to IMC during his tenure as Chairman of the Board," said Oren Shuster.
"I believe the Chairman role will be in better hands with Oren, who can fully dedicate his focus to it. It has been a pleasure to serve as the Chairman of the Board of the Company over the past few years and I believe IMC has persevered through a very challenging environment but is now positioned to excel," said Marc Lustig.
For more information:
IM Cannabis Corp.
www.imcannabis.com