Linneo wipes out the red numbers with its first medical cannabis harvest

The company of Juan Abelló, head of Torreal, dedicated to the production of cannabis for medical use -Linneo Health- is already beginning to have its first results on the table. The company has operational crops in Castilla La-Mancha and Murcia and it is the latter that have been harvested first, as this is the region where the bulk of the company’s land is registered. At the moment, there is a negative balance in its profit and loss account for the financial year 2019, which amounts to $7.45 million (€6.4 million) in red figures.

But you have to look at that data with a magnifying glass because the company is in the middle of an investment process and COVID-19. The company detailed that, although the pandemic has not influenced a drop in Linneo’s activity to ensure liquidity, they have requested a loan of $11.6 million (€10 million) with Santander, they have a line of credit with Bankia, and the contributions of the partners. From this forecast and from the strong initial investment these possible numbers are in the red zone.

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Abelló ‘collects’ in Murcia his first harvest of legal medical cannabis

The company does not have anything in ownership. Both the land and the offices in Madrid are rented, contracts that are extended as the possibilities of the company grow. One of Linneo’s greatest assets is having been the first company in the country to obtain a license from the Spanish Agency for Medicines, an asset valued at $10.9 million (€9.4 million), as well as contractual rights for the supply of the product valued at $3.7 million (€3.2 million).

Although Linneo is not the only Spanish company with a license (there are also the Alicante companies Carfina and Medalchemy and the Madrid company Olis4cure), experts in the sector predict that Abello will be the company that will position itself at the head of the sector. Therefore, it is a temporary negative balance, since the company has all the cards to lead the sector in Spain and bid for the top positions at an international level. 

First license to export cannabis to Germany

This operation in 2018 prompted Torreal and GHO to bring Linneo to market. Alcaliber was the first company in Spain to obtain in 2016 the license from the Spanish Agency of Medicines and Health Products to grow and sell medical cannabis in Spain, a license that was transferred to Linneo after the company was founded.

In 2019, Linneo received two capital injections of $2.1 million and $14 million (€1.8 and €12 million) from its shareholders, which helps to address any short-term liquidity needs caused by the Coronavirus pandemic. This summer, Linneo received the first license to export cannabis to Germany, a country where this product has a wide potential, or so the data indicated. 

According to the report of the consulting firm Prohibition Partners, the cannabis sector will move a total of $18.8 billion (€16.2 billion) in Germany within 10 years: $8.96 billion (€7.7 billion) for medical purposes and $9.9 billion (€8.5 billion) for recreational purposes. It is expected that this export route to the domains of Angela Merkel will be very good for the company.

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(Featured image by Tobias Leznem via Pexels)

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