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Althea Group (ASX: AGH) has ramped up its cost-cutting drive with an agreement to sell its MyAccess Clinics business in the UK and Ireland to the European arm of fellow Melbourne-based medicinal cannabis group Montu for $1 million.
Althea launched the MyAccess Clinics business in 2019 starting with a cannabis destination clinic in Belgravia, London, supporting a then-emerging British market for its medicinal cannabis sales which reached $4.23 million annually by the end of FY24.
In its annual report, the group said MyAccess Clinics contributed meaningfully to UK sales in FY24 - a market that represents almost 14 per cent of Althea's $30.4 million in annual sales worldwide.
In addition to two clinics in London and Bristol as well as virtual appointments across the UK, MyAccess Clinics also offers face-to-face consultations on the island of Jersey, and expanded into Ireland late last year with 2,600 registered patients across the group in the British Isles.
As part of the asset sale deed executed between Althea and Montu Group UK, the latter has committed to purchasing a minimum of 10,300 units of Althea products for two years after completion, with Althea's medicinal cannabis products to remain in the clinic's formulary for three years.
Montu, a medicinal cannabis digital appointments and delivery company, was last year named Australia's fastest-growth tech company in Deloitte's Tech Fast 50, and has been hailed as one of the great success stories of crowdsourced equity funding by Matt Vitale, the co-founder and CEO of leading platform Birchal.
Having already announced $4 million in annualised cost savings in effect from May 2024, including $1.5 million worth of staff redundancies, Althea says the MyAccess Clinics sale will lead to a further elimination of $1.5 million in annual operating costs.
Althea claims the divestment will allow for sharpened focus on key growth markets, especially cannabis beverages, with resources to be reallocated to its expanding North American operations.
"The sale of MyAccess Clinics is a strategic move that allows us to concentrate on key growth areas, particularly the high-growth cannabis beverages market in North America, while maintaining a strong foothold in the UK medicinal cannabis market," says Althea CEO and founder Josh Fegan.
"This transaction is a win-win, enabling the company to focus on building Peak Processing Solutions into a global leader in cannabis beverages while ensuring Althea products remain a strong source of revenue for AGH."
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