Cantourage announced a long-term supply agreement for medical cannabis flowers with the Swiss cannabis company Astrasana. Starting today, the company will supply four strains with a high THC content from three of its growers (LOT 420, Green Karat and Breathing Green). Initially, the flowers will be exclusively available at a selected pharmacy in Zurich.

While we do not expect a significant financial contribution in the short-term, this agreement should allow Cantourage to further gain traction in the comparably young Swiss medical cannabis market. While the legalization took place only one year ago (vs. roughly 6 years in Germany), the country recorded almost 4k patients at the end of H1 2023.

Regulatory tailwinds looming. Once the “Cannabis Act” becomes effective (eNuW: early 2024e), Germany will not only allow adults to own 25 grams of cannabis, grow up to three plants and establish non-profit cannabis clubs. Further, it is planned to de-classify cannabis as a narcotic drug (BtM). As a result, getting a prescription for cannabis should become as easy as getting one for ibuprofen 600. Through this, medical cannabis could also become part and benefit from the German e-script universe, which launched in July this year.

Executing on targeted ramp-up. Cantourage has already signed long-term supply agreements with more than 60 grower partners, is expanding its dronabinol footprint across Europe through a cooperation with a leading pharmaceutical wholesaler in Austria and launched its own telemedicine platform (telecan°). All this, coupled with the above described regulatory tailwinds is seen to support strong top-line growth (eNuW: 71% CAGR 2022-25e) while already achieving EBITDA break-even in FY23e.

Speaking of FY23e, we expect the company to report further dynamic growth with additional sequential improvements during the remainder of the year as its “Fast Track Access” platform is quickly gaining traction thanks to a gradually increasing number of fully onboarded cultivators i.e. having a product deployed at pharmacies. Mind you, Cantourage reported H1 sales of € 11m, a 90% yoy increase, whereas Q2 sales increased 86% yoy and 31% qoq.

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