Little Green Pharma reports record quarterly revenue and announces a transformative merger with Cannatrek, creating a leading vertically integrated medicinal cannabis group with strong European growth prospects.
- Record quarterly revenue of AUD 10.7 million, up 5% quarter-on-quarter
- Proposed merger with Cannatrek to create a combined FY2025 pro forma revenue of AUD 112.3 million
- Expected operational synergies from combined manufacturing and distribution capabilities
- Strong European sales growth, including a 30% increase in exports
- Cash position of AUD 1.65 million with AUD 4.0 million in undrawn facilities
Record Revenue and Market Momentum
Little Green Pharma (ASX, LGP) has delivered a standout quarter, reporting record revenue of AUD 10.7 million for the three months ending December 2025. This marks a 5% increase on the prior quarter and a 10% rise compared to the same period last year. The growth was notably driven by a 30% surge in European sales, including a significant AUD 0.6 million oil shipment to France, underscoring the company’s expanding footprint across key export markets.
Despite the revenue gains, cash receipts were slightly down compared to the previous quarter, attributed to timing differences in deliveries and payment terms. Nevertheless, the company maintained a solid cash balance of AUD 1.65 million at quarter-end, supported by AUD 4.0 million in undrawn credit facilities, providing a buffer for ongoing operations and growth initiatives.
Transformative Merger with Cannatrek
Post-quarter, Little Green Pharma announced a pivotal merger agreement with Cannatrek Ltd, one of Australia’s most prominent medicinal cannabis companies. The proposed scheme of arrangement, announced on 14 January 2026, will see LGP acquire 100% of Cannatrek’s issued capital, creating a vertically integrated medicinal cannabis powerhouse spanning cultivation, GMP-certified manufacturing, packaging, distribution, clinics, and digital health channels across Australia and Europe.
The combined entity’s pro forma financials for FY2025 reveal a robust revenue base of AUD 112.3 million and an Adjusted EBITDA of AUD 13.0 million, with a cash position of AUD 14.9 million. Shareholders of the merged group will hold approximately 39.5% for LGP and 60.5% for Cannatrek, with potential for Cannatrek shareholders to increase their stake via contingent value shares.
Synergies and Strategic Outlook
Operational synergies are expected to arise from leveraging Cannatrek’s underutilised GMP manufacturing capacity in Australia alongside LGP Denmark’s facilities serving European markets. The merger also aims to combine clinic and distribution operations, optimise cost structures, and accelerate European expansion, where the medicinal cannabis market is poised for rapid growth.
Europe remains a focal point, with Germany’s cannabis imports rising 19% quarter-on-quarter and regulatory frameworks evolving in Spain and France. LGP’s established presence and investments, including a stake in Trichome Pharma S.L., position the group well to capitalise on these developments.
Regulatory and Market Developments
Beyond Australia and Europe, the company highlighted a significant milestone in the US cannabis sector, the rescheduling of cannabis from Schedule I to Schedule III under an Executive Order signed in December 2025. This federal reform is viewed as a major step forward, potentially unlocking broader market opportunities and regulatory clarity.
Domestically, LGP continues to innovate with new product launches, including the Indicare oils range tailored for Department of Veterans Affairs patients and upcoming edible products. The Health House distribution business is also expanding, enhancing the company’s supply chain capabilities.
Looking Ahead
The merger timeline is set with key court hearings and shareholder meetings scheduled through April 2026, aiming for implementation by May. Investors will be watching closely to see how the combined group executes on synergy realisation and market expansion, particularly in Europe’s fast-evolving medicinal cannabis landscape.
Bottom Line?
As Little Green Pharma and Cannatrek prepare to unite, the medicinal cannabis sector braces for a new era of scale and strategic depth.
Questions in the middle?
- How quickly will the combined group realise operational synergies and cost savings?
- What impact will evolving European regulations have on market access and growth?
- How might the US cannabis rescheduling influence LGP’s international strategy?