Curaleaf adds Northern Green Canada to its portfolio for 16M
Added on 03 May 2024
Russian-American billionaire and Curaleaf CEO Boris Jordan expressed enthusiasm about the acquisition, emphasizing its significance for Curaleaf's international expansion strategy.
"We expect the NGC acquisition to be a highly accretive deal that marks Curaleaf's first step into the Australasian markets, creating a true global cannabis company with global brands. It allows Curaleaf to safeguard our position in Europe, enhancing our supply chain while increasing our margins.”, said the founder and executive officer of Curaleaf. Jordan also touched upon the new opportunities Northern Green Canada opens up for the cannabis giant in the German market. “The opportunity in Germany alone cannot be understated, and we continue to prepare strategically for that moment and beyond. We are committed to delivering the highest quality flower in every market we operate, and we are thrilled to welcome the NGC team to the Curaleaf International family."
The acquisition terms involve an initial payment at closing, which consists of Curaleaf's subordinate voting shares valued at around $16 million (22 million Canadian dollars). Additionally, there's an earnout component tied to NGC's 2024 performance, potentially worth up to 50%, paid in cash and additional shares.
This strategic move by Curaleaf aims to enhance its position in European markets, particularly in countries like Germany, Poland, and the United Kingdom. Moreover, it provides Curaleaf, headquartered in New York, with an entry point into the emerging markets of Australia and New Zealand.
This cannabis giant’s desired markets are said to be collectively worth 55 billion USD by 2027, Germany, Australia and New Zealand being expected to play significant roles in the near future. In the realm of medical cannabis, Australia is rapidly emerging as a significant force, poised to make a notable contribution to the projected 2027 global sales forecast. Since the legalization of medical cannabis in 2016, the Land Down Under has experienced a meteoric rise in its cannabis industry, driven by a combination of factors that highlight its potential as a key player in the global market.
One of the primary drivers of Australia's cannabis market growth is its burgeoning patient population. According to the Australian Institute of Health and Welfare, approximately 700,000 patients have been prescribed cannabis-based medication between 2022 and 2023. With an increasing number of individuals seeking alternative treatment options, fueled by growing awareness of the therapeutic benefits of cannabis, demand for medical cannabis products has soared. This steady uptick in patient numbers has created a fertile ground for market expansion, laying the groundwork for Australia's ascension in the global cannabis arena. The countries’ unwavering commitment to upholding quality standards has enhanced its allure as a preferred destination for cultivators and investors seeking a stable and conducive operating environment. By championing regulatory compliance and excellence in product quality, Australia has solidified its reputation as a jurisdiction of choice for those looking to establish a foothold in the hemp industry.
The same can be said for New Zealand. Since the introduction of access to imported non-pharmaceutical medical cannabis products in 2016, New Zealand has been on a journey of regulatory reform aimed at enhancing accessibility, quality, and affordability of medicinal cannabis treatments for its citizens. The recent overhaul of the regulatory framework in 2020 marked a significant milestone with the establishment of the 'Medicinal Cannabis Scheme,' introducing a new era for medical cannabis in the country.
Under the initial scheme, the process of prescribing cannabis products was uncomfortable at best, requiring approval from a government minister on a case-by-case basis. However, the introduction of the Medicinal Cannabis Scheme streamlined this process by empowering doctors to prescribe medicinal cannabis without seeking approval from the Ministry of Health, a move that significantly improved patient access to treatment options.
Now, as New Zealand looks towards the future, further changes to the regulatory framework are underway. Although authorities were expected to finalize these adjustments by early 2024, New Zealands’ neighbor and fellow Commonwealth members’ pioneering spirit in the region concerning medical cannabis reform will determine the countries’ government to facilitate easier export of cannabis products, paving the way for domestic producers to expand their operations and achieving better economies of scale along with . By enabling the export of cannabis seed, starting material, cannabis-based ingredients, and medicinal cannabis products for testing, analysis, and research purposes, New Zealand will bolster its position in the global cannabis market while simultaneously driving down the cost of treatment for patients within its borders.
Crucially, these regulatory reforms will also remove certain barriers to export, such as the requirement for consignments of starting material to meet minimum quality standards before export and the necessity for cannabis-based ingredients to meet minimum requirements if manufactured to Good Manufacturing Practice (GMP) standards. By eliminating these hurdles, New Zealand seeks to create a more conducive environment for its burgeoning medical cannabis industry to thrive, positioning itself as a hub for innovation and research in the field of medicinal cannabis.
Besides taking advantage of Germany’s recent legalization of recreational cannabis through Northern Green Global, an NGC platform based in Unterschleissheim, Germany serving as a platform for Northern Green Canada to expand their operations beyond the American continent, Curaleaf Holdings will definitely solidify its status as the worlds’ largest cannabis producer with this historical acquisition, now digging into the emerging Australasian market and establishing a worldwide presence in the truest form of the word.
Written by DANIEL CIUREA
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