Little Green Pharma Ltd. announced its entry into a 2.5 year take-or-pay contract ("Agreement") with new distribution partner, Four 20 Pharma GmbH ("Four 20 Pharma"), for the exclusive supply of LGP's recently-developed, high-THC (25% THC) SMS strain into Germany. The Agreement represents a minimum take-or-payment commitment of at least $7.5 million over 30 months, including payment of a development fee to help defray strain development costs. The transaction resulted from a recent, tightly-executed bidding process for the 25% THC strain which successfully positioned LGP in front of a range of potential new distribution partners.

The Company proposes to engage in similar tender processes for other new strains, as well as rolling out SMS into other jurisdictions. The transaction represents a significant evolutionary step in LGP's supply processes and contract portfolio, with the Agreement joining LGP's minimum exclusivity commitment purchase agreements with Demecan in Germany for the potential supply of up to 1.3 tonne per year (representing an annual revenue opportunity of ~$9 million1) of white-label flower from its Danish Facility, and with Sana Life Sciences in the UK for the supply of LGP-branded oils (representing an annual revenue opportunity of $1.44m2) from its Western Australian Facility (see ASX announcement dated 2 May 2022).