London-listed marijuana business Kanabo (KNB.L) has struck a deal that it says will make it Europe’s biggest publicly traded cannabis company.
Kanabo said on Monday it had agreed terms to buy the European operations of Materia, a cannabis processor and supplier. Exact terms weren’t disclosed but Kanabo said the deal would be paid for through shares.
Materia owns a cannabis processing plant in Malta and a wholesaling business in Germany, which is the largest market for legal marijuana in Europe.
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Kanabo’s chief executive Avihu Tamir said the deal would provide “strong distribution channels in the German market and offer new strategic agreements with premium cultivators around the world.”
“Together with Kanabo’s R&D and commercialisation capabilities, I expect this enlarged group to become the biggest public cannabis company in the UK and EU and puts us in a unique position as the multibillion pound medicinal cannabis market begins to grow in Europe,” Tamir said in a statement.
Kanabo makes vaporised marijuana pods and inhalers for medicinal use. The Israeli company also makes CBD products for the “wellness” market. The company listed in London in February, becoming one of the first businesses to come to market in the UK after the regulator relaxed rules around cannabis listings last year.
Read more: London-listed Kanabo launches first UK medical cannabis product
Kanabo said the deal with Materia would help it commercialise its products, which are still in their early stages.
“We are excited at the prospect of joining forces with Kanabo’s team,” Materia’s chief executive Deepak Anand said. “As the first medical cannabis company approved to list on the London Stock Exchange, Kanabo’s ambition to be a market leader matches our own and we believe that our combined infrastructure will generate significant value for our shareholders, partners, customers and patients.”
As part of the deal, Kanabo will extend a CA$2.5m (£1.5m, $2m) loan facility to Materia, with $500,000 available for drawdown immediately.
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Shares in Kanabo shot up 7.8% on news of the deal, valuing the business at £60m.
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