Toronto-based investment firm LGC Capital is buying nearly half of Italy’s “cannabis light” pioneer EasyJoint for 4.8 million euros ($7.15 million Canadian dollars) in cash and stock, as the companies set their sights on expansion into the broader European and Canadian markets.
LGC will acquire 47% of EasyJoint for 2.56 million euros in cash and 2.22 million euros in stock, the companies announced Monday.
From its 450-plus locations in Italy, EasyJoint recorded CA$6 million in sales of roughly 150 branded items for the past 10 months, ranging from low-THC dried flower to CBD oils, according to a news release.
The law – intended to help revive a crop that was once widely cultivated in the country – did not ban cannabis flower if the level of tetrahydrocannabinol (THC) is under 0.2%.
That sparked a massive legal market for so-called “cannabis light” products.
“We took advantage of a new hemp cultivation law creating a whole new market from scratch,” Luca Marola, EasyJoint founder, told Marijuana Business Daily.
“For many in Italy, to this day, EasyJoint is synonymous with quality hemp flowers with high CBD content. We created a market, and we’re conducting it towards complete legitimacy.”
Hemp flower is not allowed to be smoked.
Now, EasyJoint has its eye on the broader European market.
CEO John McMullen of LGC Capital said EasyJoint has recognized brands that can penetrate European markets where hemp products are legal.
“Europe is a market that can be as big or bigger than what is in the United States,” he said. “And we are working on bringing the stores to Canada.”
Marola said the low-THC cannabis market in some European countries is ripe for capitalization.
He said LGC’s long-term vision aligns with EasyJoint’s, putting the companies in a position to “grow exponentially and assert ourselves as leaders of the European market.”
Marola is also watching how Italy’s high-THC medical cannabis industry develops, calling the market a potential “next step.”
“If at any point the state allows therapeutic cannabis to be cultivated, we’ll be ready for it,” he said.
That could come sooner rather than later.
In August, Italy signaled its intention to loosen the military’s grip on the cultivation of medical marijuana. The move also could increase opportunities for international MMJ companies participating in the nation’s medical cannabis industry.
Italian law already allows the health ministry to grant cultivation licenses to private companies, but this was the first sign of political willingness to boost production through licensing public-private partnerships.
Matt Lamers can be reached at [email protected]
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