IM Cannabis Corp C.IMCC

News

[Seppi2019]

https://www.stockwatch.com/News/Item?bid=Z-C%3aIMCC-2929899&symbol=IMCC&region=C

 

ORIGINAL: IMC Announces Business Update and Review of Q2 Milestones

 

2020-07-06 08:35 ET - News Release

 

IMC Announces Business Update and Review of Q2 Milestones

Canada NewsWire

TORONTO and GLIL YAM, Israel, July 6, 2020

• IMC has bolstered the network of pharmacies, distributors and supply partners that are supporting the IMC brand in both Israel and Germany
   
• Decriminalization legislation in Israel to significantly increase market potential
   
• Formal launch of IMC brand in Germany expected in Q3 2020
   
• Recent warrant exercise adds $6.0 million to treasury, IMC fully funded for existing growth initiatives

^* Currency is in CAD$ unless specified otherwise

TORONTO and GLIL YAM, Israel, July 6, 2020 /CNW/ - IM Cannabis Corp. (the "Company" or "IMC") (CSE: IMCC), one of the world's pioneering medical cannabis companies with operations in Israel and across Europe, is pleased to provide a review of significant milestones achieved in the second quarter of 2020 and a business update.

Oren Shuster, Chief Executive Officer of IMC commented, "The second quarter of 2020 was surely the most exciting period for IMC in its history and the milestones we achieved have set the stage for many years of growth for the IMC brand and for shareholders. While the highlights of the past three months were Focus Medical signing multiple sales agreements with the largest pharmacies in Israel for expected revenue of $193.5 million over the next three years at an expected gross margin of 50%, there were many other achievements that place the Company in a strong strategic position. In Israel, we increased our domestic supplier base and imported medical cannabis from both Canada and Spain. Our optimism in Israel has never been higher with the government passing a first reading of legislation that will decriminalize recreational cannabis, which should significantly expand the market for cannabis in Israel. In Europe, we are also steadily increasing our distribution network to blanket the fragmented pharmacy channel and we plan to deliver more firm commitments in that market in the near-term."

Israeli Market Update

The growth prospects for IMC in Israel have materially improved with government efforts to reform cannabis regulations. On June 21, 2020, the Ministerial Committee on Legislation in Israel approved a bill for the decriminalization of recreational cannabis. Three readings are required for legislation to become law and there is strong support for decriminalization among voters and the largest political parties. Not only did the Israeli government advance decriminalization efforts in the quarter, but the Israeli Ministry of Economy signed a Free Export Order for medical cannabis products. Under the Free Export Order, successful applicants will be permitted to export medical cannabis to foreign markets such as the European Union.

While we await further developments regarding decriminalization in Israel, Focus Medical Herbs Ltd. ("Focus Medical") has signed six binding sales agreements for the distribution of IMC-branded products with leading pharmacies in Israel that should extend our leadership in the Israeli medical cannabis market. Total consolidated revenue from all binding sales agreements in Israel is expected to be $193.5 million with an expected gross margin of 50% over the next three years. A total of 33,075kg of IMC-branded medical cannabis will be delivered by Focus Medical to Israeli pharmacies under the sales agreements between Q2 2020 and 2023, of which 3,000kg of the medical cannabis is expected to reach pharmacies in 2020 with 482kg having already been delivered in Q2 2020.

Supply to fulfil the pharmacy sales agreements is now fully contracted. Focus Medical has signed and announced supply agreements with Cannomed Medical Cannabis Industries Ltd. (TASE:CNMD), Intelicanna Ltd. (TASE:INTL), Way of Life and Cannation, in addition to exclusive supply from Focus Medical and international supply from Spain and Canada. Diversity of supply is critical to ensuring that the high-quality IMC-branded medical cannabis is available to patients whenever they need it.

IMC also continues to find opportunities in the next generation of cannabis products and evidence-based research. We announced a binding term sheet for the exclusive distribution rights of CannEpil® in Israel for a period of five years. CannEpil® is a phytocannabinoid medicine developed for the treatment of refractory epilepsy. Additionally, research performed by the Technion - Israeli Institute of Technology indicated that two strains of IMC-branded medical cannabis were found to be effective in reducing migraine frequency. We continue to develop relationships with leading innovators in medical cannabis and this will be critical to the development of the next generation of evidence-based medicine and global leadership in medical cannabis.

German Market Update

Our EU-GMP certified subsidiary in Germany, Adjupharm GmbH ("Adjupharm"), has developed a comprehensive marketing plan for the formal launch of IMC-branded products in Q3 2020. The first step in the marketing plan is to deploy a sales team and physician education program to build brand recognition and demand. Adjupharm's facility is prepared for increased international shipments with a certified vault able to store 500kg of medical cannabis and the Company is utilizing its EU-GMP license to package bulk cannabis from import which will enable seamless distribution.

We remain well positioned in Germany and have now secured three sales commitments to medical cannabis distributors through Adjupharm. Adjupharm now has binding sales commitments for a total of 825kg of medical cannabis in Germany under the IMC brand, 530kg of which will be delivered in 2020. Medical cannabis sold under the sales commitments will be fulfilled primarily from the Company's EU-GMP certified supply partner in Europe.

IMC has an active pipeline of other distributors with which it plans to enter sales commitments to cover Germany's many territories. Ownership of retail pharmacies in Germany is highly fragmented and supplying distributors with consistent volumes of high-quality IMC-branded products is imperative for brand recognition in the German medical community.

Corporate Update

Most recently, IMC announced that investors exercised 12,350,795 common share purchase warrants and broker compensation options, of which the last tranche was to expire by June 27, 2020.  This amounted to gross proceeds of approximately $6.0 million and represented 92.1% of the warrants and broker compensation options expiring on or prior to June 27, 2020.