CanniMed, Fagron deal is ‘boon’ for province

A Saskatoon-based medical marijuana company says a new marketing and distribution deal signed this week with a Dutch pharmaceutical company could have significant benefits for Saskatchewan.

CanniMed Therapeutics Inc. and Rotterdam-based Fagron NV said Wednesday in a joint news release that the agreement will get the local firm’s products into 22,000 German pharmacies, which serve that country’s 82 million people.

Sales in Germany are expected to begin late this year, once the necessary certifications are obtained, and then expand into 16 other countries with a total population of 760 million, according to the news release.

“That gives us access to start looking very aggressively at marketing internationally, which is all good for job creation and wealth creation and all the other things that come back to Saskatchewan,” CanniMed chief executive officer Brent Zettl said in an interview.

CanniMed is in the midst of a $10.5-million expansion at its grow facility southeast of Saskatoon, where it employs about 200 people.

Zettl said the company now has the means to move the cannabinoid oils and other goods produced when the expansion is complete next year.

“We believe CanniMed has the opportunity to become a long-term major medicinal brand in Germany, where demand for medicinal cannabis products exceeds supply,” Fagron chief executive officer Rafael Padilla said in a statement.

CanniMed has spent the last two months fending off a hostile takeover attempt launched last year by Edmonton-based Aurora Cannabis Inc.

The larger company capped its offer at $24 per share, or about $550 million. CanniMed shares have been trading above that level for a week.

Aurora has argued that acquiring CanniMed will complement its existing operations and allow for greater growth, while the Saskatchewan company is urging its shareholders to reject the deal and instead support its purchase of Tragically Hip-backed Newstrike Resources.

Zettl said the hostile bid is an “anchor” weighing down CanniMed’s share price, and the company’s agreement with Fagron will be a “boon” for it and the province by allowing for “significant” export sales.