There’s a three-letter abbreviation you are going to see a lot in this article. It’s GMP and it stands for good manufacturing practice.
That's because it is one of a handful of medicinal cannabis companies across the globe that has EU-GMP certification. As Fleta Solomon, the company’s chief executive, points out: “It is the highest recognition available in the pharmaceutical industry.”
The accreditation means it has met and surpassed stringent criteria governing how its tetrahydrocannabinol (THC) and cannabidiol (CBD) products are created at a laboratory in Perth, Western Australia, from crops grown in an indoor facility elsewhere in the state.
Australia's first cannabis export to UK
It has allowed Little Green Pharma to make Australia’s first export to the UK, after a recent change to legislation here, which will provide relief for sufferers of conditions for whom only highly-refined derivatives of the plant will work.
The GMP licence also allows the company to target the German market, which is the most developed on the continent. That prospect is "not far off", according to CEO Solomon.
After that, she and her tight-knit team will focus on “another couple of EU countries”, while South America is also “on the horizon”.
“The highlight for Little Green Pharma is we are in a really unique position where we can grow, manufacture and distribute to certain jurisdictions where cannabis is legal for medical conditions,” says Solomon. “There is only a handful of companies in our position.”
The key to gaining European regulatory sign-off was partnering with a Perth-based manufacturer with a track record of making controlled narcotic drugs to the highest standards.
“They were able to easily adapt to medicinal cannabis,” Solomon says of its manufacturing partner. “Their qualifications and skillset were really paramount in producing the product making sure it went through rigorous testing.”
Little Green Pharma also benefits from being the first, and currently only, Australian company to produce a locally-grown cannabis medicine for patient use.
'Oven-ready' for the ASX
This, the GMP accreditation and the fact the company had carried out pilot-scale proof of concept production meant the business listed on the Australian Securities Exchange ‘oven-ready’.
Carrying out the groundwork before tapping the market was rewarded when Little Green Pharma was able to raise A$10mln in February in its initial public offering.
That cash has been immediately put to use to expand the business internationally after ramping up the operation to 110,000 bottles per year.
It has developed four core pharmaceutical-grade products: high THC (containing the cannabis psychoactive element), high CBD and two intermediate prescription medications.
The plan – pre-coronavirus at least – was that Little Green Pharma would aim to break-even by the end of the year. No mean feat, given many businesses take years to hit this landmark.
Of course, nobody knows what the world will look like when we emerge from lockdown, but Solomon is confident demand will hold up during what could be a difficult period economically.
Lockdown makes life difficult to predict
The mainstream drug industry tends to be as close as a recession-proof as it gets – so there may be a hint there.
However, despite record company sales during the coronavirus period, there is so little known about the dynamics of the medicinal cannabis industry that the Little Green Pharma CEO won’t make any predictions.
But the building blocks for long-term growth are there. Germany is a “very large and advanced” market that has the added advantage that the costs of prescription cannabis are reimbursed, Solomon says.
The UK, she adds, is where Australia was “two or three years ago”.
“With patient advocacy and patient voices and with some medical practitioners that were in support of prescribing cannabinoid medicines for certain conditions, Australian law was able to change quite rapidly,” the Little Green Pharma chief explains. “We see a very similar pattern with the UK.”
Blue sky technologies
The blue sky for investors resides in the knowledge the group is working behind the scenes on three separate delivery technologies.
“Longer-term our main offering is not necessarily going to be the standard cannabis oils,” says Solomon.
“For us, and how this business was born, the key was coming up with a unique drug delivery system where patients benefit through doses in much smaller amounts with the same efficacious results.”
It will be interesting to see what game-changing innovations Solomon and her team come up with.