July 21, 2019

Franchise Cannabis Reports a Surge in Patient Growth at German Subsidiary and Increased Supply from the Netherlands

Franchise Cannabis Reports a Surge in Patient Growth at German Subsidiary and Increased Supply from the Netherlands

Toronto, Ontario – July 21, 2019 – Franchise Cannabis Corp. (“Franchise” or the “Company”), a global, fully integrated, seed-to-sale medical cannabis company is pleased to announce that the company’s fully owned subsidiary, ACA Müller ADAG Pharma Vertriebs GmbH (“ACA Müller”), the first license granted in Germany, reports a surge in patient growth and increased supply from the Netherlands

  • ACA Müller sales forecast to double given the announced increase of medical cannabis quota this week
  • Medical cannabis patient numbers have surged over the past few quarters
  • BfArM has confirmed they will not put a cap on imports of GMP grade medical cannabis into Germany
  • First planting underway in Denmark to start supplying the German market by Q1 2020 – larger Phase 2 facility also under construction

Over the past year, the Netherlands have limited the total shipments to Germany to a certain amount per month, of which ACA Müller has received about 25% of the quota with little increases until recently. This all changed a few days ago. Due to recent pressure from the German authorities, the Minister of Health in the Netherlands has announced they will nearly double their quota, increasing annual exports to Germany from 1,500kg to 2,500kg annually. This supply increase is expected to start next month. Not only this, but the German Minister has also clarified that Germany will not impose any limits on medical cannabis imports into the country. Based on the continued patient growth, Bedrocan supply increases, and our Denmark cultivation project currently underway, our sales are expected to surge over subsequent quarters and may signal that ACA Muller’s medical cannabis business is on the verge of exploding across Europe.

See links to articles below:

Netherlands to hike cannabis exports to Germany by 1,000 kilograms per year

German sales of insurance-covered medical cannabis continue upward trend

Second Phase of Growth

We believe the themes in the highlighted articles above demonstrate that Europe, and specifically Germany, are entering a second phase of growth. Recent government data also validates this. Medical cannabis flower sales have almost doubled year-on-year while the registered patient count has increased from around 40,000 in Q4 2018 to 65,000 at the end of Q1 2019. In a country of 85 million people we believe the recent developments in German cannabis import policy will lead to accelerated growth in patients over the next two years.

Other EU countries are taking notice as they look to Germany’s continued success with the current patient regime. Some examples of this are France starting a medical cannabis pilot programme later this year, the UK opening expanded prescriptions in October, and the Italian Ministry of Defense recently starting to import from foreign companies for patient care. Bringing over 30 years of pharmaceutical import, export, and distribution experience across Europe, ACA Müller is well positioned to expand rapidly across the European Union and be a leader in the region. We forecast substantial growth in sales over the next few quarters similar to the trend we saw in Canada, but at a much larger scale.

Given all the positive developments, we have decided to expand our licensed cultivation operations in Denmark to match the increased demand and expand our margins. First planting has commenced at our pilot grow facility and we have started construction of a nearby, larger GMP facility. We strive to be a leading cannabis platform in Germany and to execute on our business plan of becoming a fully integrated seed to sale company focused on Europe and all other global markets as they open up.

Thank you,

Clifford Starke

CEO & President

Franchise Cannabis Corp.


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