Little Green Pharma Ltd has agreed to acquire Cannatrek Ltd in a transformational merger that will create a leading vertically integrated medicinal cannabis group across Australia and Europe. The deal combines cultivation, manufacturing, distribution, clinics, and digital health platforms under one roof, positioning the combined entity for accelerated growth.
- LGP to acquire 100% of Cannatrek via scheme of arrangement
- Cannatrek shareholders to hold ~60.5% initially, with potential increase to 68.2%
- Pro forma combined FY2025 revenue of $112 million and adjusted EBITDA of $13 million
- Merger creates a vertically integrated group spanning cultivation to digital health
- Key leadership roles confirmed – Brent Dennison as Chair, Paul Long as Group CEO
A Strategic Union in Medicinal Cannabis
Little Green Pharma Ltd (ASX – LGP) and Cannatrek Ltd have announced a binding agreement for LGP to acquire Cannatrek through a scheme of arrangement. This merger is set to create one of the largest vertically integrated medicinal cannabis companies globally, combining their complementary strengths across cultivation, GMP-certified manufacturing, distribution, clinics, and digital health services.
The transaction reflects a strategic consolidation in the Australian and European medicinal cannabis markets, where scale, operational efficiency, and brand recognition are increasingly critical to competitiveness. The combined entity will leverage Cannatrek’s robust Australian manufacturing and distribution capabilities alongside LGP’s significant European cultivation and production facilities, including the largest medicinal cannabis production site in Europe.
Financial Scale and Synergies
Based on the 2025 financial year results, the pro forma combined group would have generated approximately $112 million in revenue and an adjusted EBITDA of $13 million, with cash reserves near $15 million. The merger is expected to unlock operational synergies such as optimising manufacturing capacity across continents, consolidating clinic operations, and streamlining cost structures.
Importantly, Cannatrek’s strong balance sheet is anticipated to accelerate the expansion of LGP’s European operations, a key growth driver given Europe’s projected rapid expansion as a medicinal cannabis market. The combined group also aims to pursue further international growth through acquisitions, investments, and organic initiatives.
Deal Structure and Shareholder Impact
The scheme consideration involves the issuance of new LGP ordinary shares and contingent value shares (CV Shares) to Cannatrek shareholders. Post-completion, Cannatrek shareholders will initially hold about 60.5% of the combined company, with existing LGP shareholders holding approximately 39.5%. The CV Shares provide a mechanism to adjust ownership based on future liabilities, potentially increasing Cannatrek’s stake to up to 68.2%.
The merger is subject to customary conditions including shareholder approvals, court sanction, regulatory consents, and the maintenance of certain financial thresholds. Both companies’ boards unanimously recommend the transaction, with key directors committing to vote in favour, barring any superior proposals.
Leadership and Governance
Leadership of the combined group will draw from both companies, with Brent Dennison appointed Chair and Paul Long as Group CEO. Cannatrek’s CEO Jason Rance will lead Australian operations, while Cannatrek’s CFO Paula Bulter will serve as Group CFO. This leadership blend aims to harness the expertise and experience of both teams to drive integration and growth.
The merger aligns with LGP’s previously disclosed strategy of industry consolidation and market rationalisation, positioning the combined group to capitalise on evolving regulatory environments and increasing global demand for medicinal cannabis products.
Bottom Line?
As the merger progresses through shareholder and regulatory approvals, investors will be watching closely to see how effectively the combined group captures synergies and scales its European operations.
Questions in the middle?
- How will the contingent value shares convert in practice, and what liabilities might affect final ownership?
- What are the integration risks and timelines for combining manufacturing and clinic operations?
- How will the combined group navigate regulatory complexities across Australian and European markets?