Australian medicinal cannabis leaders Little Green Pharma (ASX:LGP) and Cannatrek have entered into a binding scheme implementation deed, under which LGP will acquire 100% of Cannatrek’s issued capital via a scheme of arrangement.
Cannatrek, a vertically integrated medicinal cannabis manufacturer and distributor, operates GMP-certified manufacturing facilities, medical clinics, and distribution channels across Australia.
Under the deal, Cannatrek shareholders will receive new LGP ordinary shares and contingent value shares, resulting in Cannatrek holding approximately 60.5% of the combined group and LGP shareholders retaining around 39.5% at completion.
CV Shares could increase Cannatrek’s stake by up to 8% depending on future outcomes.
Both companies' boards—representing 22% of Cannatrek shares and 13.1% of LGP shares—unanimously support the merger, subject to the Independent Expert confirming it is in Cannatrek shareholders' best interests.
The merger will create a fully vertically integrated medicinal cannabis group with combined pro-forma 2025 revenues of $112 million, adjusted EBITDA of $13 million, and cash of $15 million.
Synergies are expected from shared GMP manufacturing, combined clinic operations, optimised cost structures, and enhanced distribution in Australia and Europe.
The transaction aligns with LGP's strategy of industry consolidation and positions the combined group for international expansion, leveraging Cannatrek's strong balance sheet and LGP Denmark’s manufacturing capacity.
Leadership will be drawn from both companies, with Paul Long as Group CEO and Brent Dennison as Chair. The merger is expected to be voted on by shareholders in April.