TIDMHELD
RNS Number : 7286B
Hellenic Dynamics PLC
06 June 2023
Hellenic Dynamics plc
("Hellenic Dynamics" or the "Company")
Business Update
London, 06 June 2023: Hellenic Dynamics plc (LSE: HELD) is a
medical cannabis cultivator specifically focused on the cultivation
and supply of tetrahydrocannabinol (" THC") dominant strains of
medical cannabis flowers destined for the rapidly growing medical
cannabis markets across Europe. In December 2022, Hellenic Dynamics
became the first medical cannabis cultivator to list on the London
Stock Exchange's main market for listed securities.
Highlights
-- Cultivation and Equipment
-- Details of adapted Strategy to the changing dynamics of the European medical cannabis market
-- Update on GMP Certification
-- Renewable Energy Update
Hellenic Dynamics' Business Model
Hellenic Dynamics' core strategy is to develop and operate its
40,000 square metre cultivation area for THC-dominant medical
cannabis permitted by its licence from its 195,506 square metre
facility located near Thessaloniki in Northern Greece.
The facility benefits from a relatively low cost base resulting
from a comparatively low cost of power and one of the lowest labour
rates for skilled and semi-skilled labour in Europe as well as
having its own running water supply, meaning that utility costs are
significantly below standard market rates for other cultivators.
The active THC cultivation area is one of the largest in Europe,
capable of producing over 54,000 kg of dried medical cannabis
flowers per annum when in full production.
The location of the facility also enables Hellenic Dynamics to
easily export its THC dominant medical flowers to any of the 25
countries in Europe that currently allow medical cannabis
prescriptions to patients, in a market expected to reach EUR43.3
billion per annum by 2027, twice the size of the current north
American and Canadian markets combined.
Hellenic Dynamics' adapted strategy
Hellenic Dynamics is currently on track to have its first
cultivation underway in late summer 2023.
Hellenic Dynamics is a medical cannabis cultivator. As the
industry enters 'cannabis 2.0' which has seen a shake-up of the
medical cannabis market, through its agility the Company intends to
move with market conditions and demand. This has led to a review of
the Company's cultivation strategy which will see Hellenic Dynamics
harnessing its scale and low cost operating model in a way that it
anticipates will accelerate revenue generation and provide an
opportunity to itscustomers. Such a strategy has not yet seen in
the cannabis space to date. This modified strategy and operating
model, details of which are set out below, is different and
disruptive in comparison to the Company's peer group and is
designed to match the rapidly evolving regulated medical cannabis
market in Europe.
As the medical cannabis markets across Europe are now defining
the industry standard for the supply of medical cannabis products
from cultivator to patient, the certifications for these products
is also evolving. Hellenic Dynamics' strategy contained within the
Company's prospectus was to gain both Good Agricultural and
Collection Practice ("GACP") and a EU Good Manufacturing Practices
("EU-GMP") certifications. EU-GMP is the most intensive
certification for any medical cannabis cultivator to achieve from a
capex, opex and time to issuance perspective, with very little
advantages for end sales price of products. As the industry enters
'cannabis 2.0' many medical distributors have built their own
EU-GMP facilities within their licensed distribution buildings
across Germany as have other potential customers in the other
markets that Hellenic Dynamics wishes to sell its products into.
For this reason, the Company has decided not to invest considerable
funds and time into the construction and certification of an EU-GMP
facility in the current phase of its development. Hellenic will
instead concentrate on the cultivation and supply of GACP flowers
to its EU-GMP certified distributors, saving the Company
considerable time and expense. This again shows the evolving nature
of the European cannabis markets.
The Company will release more details of its adapted cultivation
strategy in due course.
Cost savings
In addition, since the Company's last business update, Hellenic
Dynamics has managed to secure significant discounts from its
equipment suppliers and has also managed to secure unused second
hand equipment, where possible, to keep costs as low as possible
while ensuring all equipment is of the highest and modern standards
throughout the facility.
The Company already benefits from a relatively low cost of
power, however Hellenic Dynamics is in advanced discussion with
suppliers of solar energy from within Greece to further reduce its
cost base. This potential new supply should bring the Company's
energy cost down even lower and provide a unique advantage to its
business model.
The Company will update the market on progress with this
development in due course.
Davinder Rai, CEO of Hellenic Dynamics, commented:
"Having evaluated the rapidly changing dynamics of the European
medical cannabis markets and seen the challenges and issues that
have confronted other cultivators we are adapting our growth
strategy to take advantage of opportunities which are emerging as a
result of such changes. Our approach will now involve harnessing
the scale, low operating cost and expertise at our growing facility
to service the burgeoning demand from end use customers in our
target markets. I personally believe this strategy is the most
disruptive thing to happen to the industry since its legalisation
"
This announcement contains inside information for the purposes
of article 7 of the Market Abuse Regulation (EU) 596/2014 as
amended by regulation 11 of the Market Abuse (Amendment) (EU Exit)
Regulations 2019/310. With the publication of this announcement,
this information is now considered to be in the public domain.
The Directors of the Company take responsibility for this
announcement.
Enquires:
Hellenic Dynamics plc +44 (0)20 3818 7850
Davinder Rai davinder@hellenicdynamics.com
Cairn Financial Advisers LLP
Emily Staples / Jo Turner +44 (0)20 7213 0880
Peterhouse Capital
Lucy Williams / Charles Goodfellow +44 (0)20 7469 0930
J&H Communications
George Hudson +44 (0)7803 603130
About Hellenic Dynamics plc
Founded in 2019, Hellenic Dynamics is specifically focused on
the cultivation and supply of THC ("tetrahydrocannabinol") -
dominant strains of medical cannabis flowers, destined for the
growing medical cannabis markets across Europe. Hellenic Dynamics'
core strategy is to develop and operate its 40,000 square metre
active cultivation licence from its 195,506 square metre facility
located near Thessaloniki in Northern Greece. In full production,
Hellenic Dynamics is capable of producing over 54,000 kg of dried
flowers per annum.
Hellenic Dynamics will take advantage of its relatively low cost
base resulting from a comparatively low cost of power, having its
own running water supply and the labour rates for skilled and
semi-skilled labour in Northern Greece.
25 European countries now allow medical cannabis via
prescription and the European cannabis market is expected to reach
EUR43.3 billion per annum by 2027. Sales of Hellenic Dynamics'
dried THC-dominant cannabis flowers and extracts are initially
intended for export into Europe's largest market - Germany, in
addition to other European markets including domestically in
Greece.
As the first medical cannabis cultivator to obtain a listing on
the main market for listed securities of the London Stock Exchange,
Hellenic is significantly different to the number of CBD
(Cannabidiol) related companies that have appeared over the recent
years. Hellenic Dynamics cultivates THC-dominant medical cannabis
flowers. THC-dominant medical cannabis products are only available
via a medical prescription. Medicinal cannabis has been approved
for use both in the United Kingdom and Germany, plus 23 other
European countries, for conditions including but not limited to
chronic pain, intractable chemotherapy-related nausea, anxiety,
insomnia, Tourette's syndrome, substance use disorder, multiple
sclerosis, IBS, spinal cord treatment, lack of appetite due to
HIV/AIDS, cachexia, anorexia and glaucoma.
Caution regarding forward looking statements
Certain statements in this announcement, are, or may be deemed
to be, forward looking statements. Forward looking statements are
identi ed by their use of terms and phrases such as "believe",
"could", "should" "envisage", "estimate", "intend", "may", "plan",
"potentially", "expect", "will" or the negative of those,
variations or comparable expressions, including references to
assumptions. These forward-looking statements are not based on
historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of
operations, performance, future capital and other expenditures
(including the amount, nature and sources of funding thereof),
competitive advantages, business prospects and opportunities. Such
forward looking statements re ect the Directors' current beliefs
and assumptions and are based on information currently available to
the Directors.
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June 06, 2023 02:00 ET (06:00 GMT)
Hellenic Dynamics (LSE:HELD)
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