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Medicinal cannabis company Cannatrek has secured overwhelming shareholder approval for its merger with Little Green Pharma (ASX: LGP), paving the way for the creation of one of the largest vertically integrated medicinal cannabis businesses globally with pro-forma revenue of about $112 million.
Cannatrek shareholders today voted in favour of the scheme of arrangement, with 98.44 per cent of total votes cast supporting the deal.
The result clears a major hurdle for the merger, which will see Perth-based Little Green Pharma acquire 100 per cent of Cannatrek's issued capital and give Cannatrek a controlling interest in the merged group.
The news comes after Business News Australia reported on the reverse takeover deal in January, with the two companies combining to tackle the surging European medicinal cannabis market.
Under the merged structure, Cannatrek shareholders will initially hold about 62.6 per cent of the combined entity, and potentially up to 70 per cent.
The Victoria-based Cannatrek is a licensed manufacturer and distributor of medicinal cannabis products, with operations spanning GMP-certified packaging, proprietary brand and national compliant distribution.
Cannatrek operates within the medicinal cannabis supply chain sourcing bulk or finished medicinal cannabis from licensed domestic and international producers, manufacturing products under its own brands and distributing them to pharmacies and authorised channels across Australia.
Little Green Pharma has GMP-certified manufacturing capacity in Denmark for European markets, as well as clinic operations. The Denmark business operates the largest medicinal cannabis production facility in Europe which Little Green Pharma says currently has excess capacity available to support Cannatrek products headed for Australia and Europe.
Together, Cannatrek and Little Green Pharma are expected to create value by leveraging complementary capabilities across the medicinal cannabis value chain, improving scale and operational efficiency in Australia, accelerating the growth of Little Green Pharma’s European operations and establishing a platform for further international expansion.
Cannatrek sees the strength of its balance sheet providing access to capital to expand the European business which is expected to be the growth engine for the merged group.
The combined group is expected to deliver adjusted EBITDA of $13 million and hold $15 million in cash, based on FY25 results. Net assets of the merged entity exceed $136.7 million.
Little Green Pharma alone delivered $36.84 million in revenue and $2.9 million in adjusted EBITDA in FY25.
The deal still requires approval from Little Green Pharma’s shareholders, who are scheduled to vote at a meeting on 22 April.
A Federal Court hearing to approve the scheme is set for 24 April, with an expected implementation date of 1 May, 2026.
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