Cannabis Investment
Cannabis factory Materia acquired in major expansion
Materia, a European cannabis factory, is set to be acquired as part of Lyphe Group’s international expansion.
‘Massively positive’ effects are expected on the industry as a result of the
London-based company’s acquisition of Materia for an undisclosed sum.
Through the transaction, a new European cannabis powerhouse with established footprints in the largest markets, and capabilities across the vertical supply chain for medical cannabis, will be formed.
This is the latest big step for Lyphe, which has been trying to replicate
its successful direct-to-consumer business model internationally.
By partnering with Materia, Lyphe will not only be able to accelerate its
expansion plans but also significantly reduce patient costs thanks to
their EU GMP (Good Manufacturing Practice) certified manufacturing
facility in Malta.
Jonathan Nadler, CEO of Lyphe, said: “I am thrilled to announce Lyphe’s
agreement to acquire Materia. I’m looking forward to continuing to
better the medical cannabis industry across Europe.
“Having a vertically integrated supply chain will have a massively positive
effect on the industry, demonstrating our continued commitment to
improving the patient experience and standards of the market.”
From a small seed
Rob Reid and Stephen Murphy founded Lyphe Group shortly before the UK government legalized medical cannabis in 2018. Following the acquisition of Materia, the two entrepreneurs will continue to be Materia’s largest shareholders.
Currently, Lyphe represents approximately 40% of the UK’s medical cannabis market, which according to Prohibition Partners will reach 30,000 patients by 2022.
Over the last two years, the company has expanded rapidly within its
domestic market, reporting revenue growth of 250 percent in 2021.
Dispensary Green, a digital dispensary that enables both doctors and
patients to track prescriptions, supported the company’s telemedicine
division The Medical Cannabis Clinics (TMCC).
In addition to this, the group also operates The Academy of Medical
Cannabis, an e-learning platform that provides doctors with information
and educational resources on prescribing medical cannabis.
As part of its ambitious ‘scale-up plans,’ Lyphe secured $5m in a funding round in May.
The integration of Materia’s similar fast-growing operations will significantly accelerate this international expansion and strengthen
current operations while bolstering the group’s revenue forecast for
2023 to £23m with an underlying gross margin of more than 50%.
Cannabis factory approved for exporting
This year, Lyphe became the first company in history to export medical cannabis to another country from Malta after achieving EU GMP approval in May 2021.
Lyphe should be able to import GACP flower from a global supply chain, process it into EU GMP-certified medical cannabis, and export it throughout Europe using this facility.
This ‘state-of-the-art’ facility has a capacity to process 6,000kg of cannabis every year, representing potential sales of over €30 million.
In addition to its distribution operations in Denmark and the UK, Materia has a GMP-certified pharmaceutical wholesale operation in Germany that enables it to rapidly expand in Europe’s largest cannabis market through EU GDP (Good Distribution Practice).
The first export from Materia’s Maltese facility to Germany took place in June, nearly two years after Materia began distributing medical cannabis to pharmacies in Germany.
Lyphe’s acquisition of Materia could become a significant milestone for the European cannabis industry.
