NewsCannabis Company’s Buy And Build Strategy Boosted By High...

Cannabis Company’s Buy And Build Strategy Boosted By High Profile Investor Support

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AFTER recently announcing billionaire investor Christian Angermayer had become its largest shareholder German cannabis company SynBiotic has secured a further €7m to fuel its rapid expansion plans.

This will support its on-going search to add additional business and brands to its growing portfolio – as it also looks to secure a dual listing on the NEO Exchange in Toronto.

Created as a shell company last year SynBiotic is currently listed on the Frankfurt and Düsseldorf exchanges with a market capitalisation of €72m. 

It emerged from Chief Executive Lars Müller Solidmind Group in which Mr Angermayer is also an investor.

Traction And Visibility

Mr Müller said: “Christian is supporting SynBiotic a lot in terms of the big macro things like our listing in Canada. His team is helping us a lot with setting everything up and making the right decisions. So that’s really good to have him even more committed.

“He is very visible. So he is able to help us to get to be louder and to get more reach. And of course, Christian is an expert in terms of the capital markets. So he will be able to help us there a lot to get more traction and to get more visibility.”

SynBiotic’s growth projections

The company’s push into the Canadian cannabis market, which doubled in size last year to C$2.6bn, is aimed at introducing SynBiotic’s products and stocks into a more mature market, Mr Müller said. 

“As a stock listed company from Germany, we don’t have a real peer group now. 

“There are a few stock listed players in Europe but there is no real peer group. So when we go to Canada, there will be the biggest peer group there. 

“And of course Canadian investors, they know a lot more about cannabis and CBD than European and German investors. So it’s way easier for us to raise capital there. 

“In Canada it’s already a well known plant. In Germany and Europe, you have to explain a lot and say it’s not this evil drug and will be something really good.”

But Synbiotic is also focused on expanding its presence across Europe with its ‘buy and build’ strategy, which has seen it onboard numerous companies over the past year across the research and development, product and biotech, medical and director-to-consumer verticals, alongside its accelerator programme. 

Buy And Build Strategy

Its strategy involves targeting the ‘best’ revenue generating companies in each vertical. Right now it is primarily targeting German companies, but is poised to expand its M&A activities to Europe next year. 

SynBiotic expects this strategy to see it achieve an annual growth rate of 75% – 20% cent organically through its existing operations, and a further 55% through acquisitions. 

“If we’re not finding good players, we just start one of our own, that’s the beauty behind our buy and build strategy. 

“So we are able to buy companies, but we are also able to build companies. It’s a very nice mixture between established players and new players.”

In terms of which companies it plans to target across Europe, Mr Müller says he will focus on ‘the medical and direct-to-consumer brands’ as well as distribution verticals, as it looks ‘control the brand, and control nearly everything’. 

He then went on to elaborate on its ambitions in an additional space: “Then we have the production and biotech vertical, where we, with our company Lean Labs Pharma, we are able to produce the CBD oils on our own. It’s a highly profitable business at the moment for us. 

“Although I would say we are not overly focusing on the profitability side that much at the moment. It’s more about growth and revenue, and other other KPIs like customers.”

Lead Investor

Mr Angermayer has an eclectic investment portfolio spanning space travel, cryptocurrency and movies, but he has made a name for himself in the psychedelic medicine space with his company Atai Life Sciences, which listed in April this year and now has a market capitalisation of $2.08bn. 

While he will now have a much larger and more visible presence in SynBiotic following the recent share acquisition, he has been a ‘core investor from the beginning, says  Mr Müller. 

“Christian had an initial stake in the business, but the new deal has seen him take the shares of initial investor Social Chain, and we are delighted that he has now has upped his stake to 45% of the company.” 

His continued support of SynBiotic is evidence of his ‘super bullish’ attitude  towards the cannabis space.  

Mr Müller believes there is still much work to be done around destigmatisation in the cannabis sector, in which Mr Angermayer could play an important role. 

He explained: “The stigma plays an important role in my personal opinion, not only on the customer side, but also on the doctor and pharmacist side as well. And so they have to learn more about the plant, about cannabinoids to be able to give medical cannabis to their patients.”

SynBiotic’s Companies

GreenLight Pharmaceutical LTD – Research & Development 

SynBiotic acquired a 25% stake in the Irish biopharmaceutical company in November 2020. GreenLight, founded in 2014, is the first Irish pharmaceutical company to focus exclusively on the clinical use of phyto-cannabinoids.

NeuroTheryX Canada Ltd – Research & Development 

In April 2021, SynBiotic announced plans to launch a 100% takeover of NeuroTheryX R&D platform by April 2023. NeuroTheryX is based in Toronto and uses AI to analyse and catalogue cannabinoids both hemp and over 100 over cannabinoid and terpene containing plants. 

Lean Labs Pharma GmbH – Production & Biotech

SynBiotic created Lean Labs, a CBD extraction and production company based in Germany, and owns 100%. It manufactures and distributes raw materials for the wider company. 

SynBiotic also lists a second undisclosed Production & Biotech company which it is currently in M&A discussions with.

Solidmind Group GmbH – Medical & D2C 

Solidmind Group was the SynBiotic chief executive Lars Müller’s first company, which he co-founded in 2015 and is still CEO of. It was SynBiotic’s first acquisition and it owns 100%. Solidmind develops products and builds brands across the wellness industry. 

Hempamed – Medical & D2C

Hempamed is listed as a Solidmind Group brand and is described as SynBiotic’s “flagship brand”. It is a major CBD retailer in Germany and also launched in the UK last year. It was acquired by the company in 2020. 

BioCBD – Medical & D2C 

BioCBD is another brand listed under Solidmind Group, and is a German retail marketplace for CBD and cannabis-based products, also acquired by SynBiotic in 2020. 

Cannexo GmbH – Medical & D2C

Cannexo is a sales joint venture in which Synbiotic owns just over 50.1%. It will organise sales, marketing and trade for pharmaceutical and wellness products, and is understood to be a B2B vehicle. Lars Müller is also a managing director of the company. 

GECA Pharma GmbH – Medical & D2C

GECA Pharma is an import and distribution company, selling pharmaceutical drugs, active ingredients and medical devices in Germany. SynBiotic owns 100% of the company after acquiring it in May 2021. 

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