Little Green Pharma Ltd (LGP) Earnings Call Transcript & Summary

Welcome, everyone, to today's webinar for Little Green Pharma, which, as you know, has stock code -- ASX stock code LGP. Shortly, I'll introduce Little Green Pharma Managing Director, Paul Long, who will provide an overview of LGP's March quarterly results. In addition, Paul will provide an update on LGP's operational activities including the acquisition of Australian medicinal cannabis distribution business, Health House, and the continued acceleration of LGP's expansion into the lucrative European and U.K. markets. At the conclusion of the presentation, Paul will also be on hand to answer any questions you may have, which can be submitted by the Q&A button on the bottom of your screen. So during the presentation, if you think you have a question or you'd like something to be put to Paul, please drop it down in the Q&A button on the bottom of the screen, and I will raise that directly with Paul at the end of his presentation. I would now like to introduce Little Green Pharma Managing Director, Paul Long, who will go through the formal presentation. Paul, over to you.

Thank you, David, and good morning and good afternoon to everyone, and thank you for joining. David, we might just jump straight to Slide 3, if we can. Thank you. A slide that we always kick off with in these presentations, gives everyone a really good snapshot. Looking at the attendee to today's meeting, a lot of familiar names. So I won't spend too much time on here. But the real focus on this slide and what we see in our strategy is an evolution of the brand. So the top left in the screen there, we are definitely looking at this industry through the lens of multiple brands and a House of Brands strategy at Little Green Pharma. So that continues to pay some real dividends for us and we'll continue to do that both organically and through potential acquisitions as we see this market begin to go through a consolidation phase, which we're seeing at the moment. I guess the other big thing to point out on this slide would be the capacity, production capacity. So at the moment, we see unprecedented demand really in volume sales of flower, particularly into the German market at the moment. And so we signed up in Denmark, which we'll talk a little bit more about in this slide, but we're producing now up to about 7 tonnes of product from that site, but we have the capacity to produce 30 tonnes, as you can see on that screen, of biomass and about 21 tonnes of final finished flower. So we are in the process of looking to scale that up. And if we look at the demand that we have just in the pipeline, just into the German and U.K. market at the moment, and you just look at our purchase orders, we've got some significant demand. So we see the opportunity just to continue to scale into that site. And for those that don't know that site, it was a site that the Canopy Growth Company invested over $120 million in just setting up. We purchased the site for $20 million, and we own that site debt-free up in Denmark. So our ability to the CapEx involved to scale up into more tonnage from that site is very, very limited, albeit there's a little bit of CapEx to be done on fit-out as we scale into new rooms. If we have a look at the revenue and cash receipts for the quarter, and you'll see on screen there quarter-by-quarter, but the key points on this slide would be, if you look at our March quarter of $9.6 million of revenue unaudited, that's relatively consistent with our last quarter and a relatively good result. We're comfortable and quite happy with this result, particularly given what we see on an annual basis in January, it's always a really slow month for us and for the industry. And really, that's driven by doctor scripts coming out of the country. So there's a lack of volume that typically happens. We always see quite a big drop off. What we did see, and as you can see on 1 of the points there on the screen is, we had a record month in March. We had a very strong February and a record month in March of $4 million of revenue for the month, which was a huge result. So really encouraging to see that. Our cash receipts were again relatively consistent, $9.6 million with an additional $700,000 coming from Health House. And if you then have a look at these numbers now given that we finished our financial year '25 with this final quarter, unaudited revenue looks like we'll have $36.6 million, and that represents a 40% top line growth. So certainly, in this industry at this moment in time, we think that's an outstanding result. And I think in any industry to see a top line 40% revenue growth would be pretty happy and comfortable with that growth for the year. So yes, a really strong finish to the year and a good overall result for us. If we jump in and have a look at the revenue by product on this slide, the key points here would be that we saw a really big increase in the global flower sales, and that was largely driven by a 115% growth into Europe. So you see in that FY '25 Q4, you can begin to see some really good growth into -- if we have a look at -- sorry, if we have a look, here by products, what we can see is we've got that -- yes, the flower growth, so green section of the slide there, and quite a significant growth into that quarter. So that was driven, as I said, by a large growth in European growth sales in that quarter. We expect to see significant continued growth into that category. And we did see a slight decline in flower and oil sales into the Australian market, but that was buffeted overall by the growth into the European supply. And also, I think the lower sales we saw, as I mentioned, into this quarter for the European -- for the Australian side of the business was largely driven by that January cycle where we would expect to have a lower month in Australia. If you look at the bottom graph there of annual revenue by category overall, what you can see is a bit of a -- obviously, a continued trend in growth in flower, continued trend in a pretty similar amount for oil year-by-year. Even if you go back all the way to financial year '22, you can see that our oil sales have been relatively consistent. But really where we're seeing growth is the flow. But what is interesting and quite exciting is the other category there. And although that represents visually only a small component of FY '25, you can see it's actually coming off at a low base, but a relatively positive increase for the month -- for the year of financial year '25, and we expect to see that to continue. So revenue by segment. We're looking here between Australia and Europe, which is our primary focus. And as I've mentioned previously, where we have seen significant growth is into the European market, so you can visually see that on this top slide here. If you look quarter-by-quarter, where for financial year '25 Q4, we can see that significant increase, almost a 50% increase in the European sales for the quarter and a decline in the Australian sales. Again, largely, not entirely, but largely driven by the month of January and -- but certainly encouraging to see the European sales. And what we did see in the month of March was a really strong month both in Australia and up in Europe as well, which is great. On the below slide, we can see the growth in year-by-year between Australia and Europe. And between '23 and '24, we had a fairly flat year inside the European market. But as expected and as predicted in the last few quarters, we can see here in FY '25, that top blue bar on the graph, they're beginning to grow. And we do, as I've said many times on these calls, we expect that part of our market to be the fastest growing, and we expect over time in the coming years for that to be the majority of our business, whilst the core focus of the company, who we are and our foundations and our growth sit here in Australia, we still believe there's a significant upside and a big consolidation play happening in the Australian market, we see the real growth into those European markets. This slide has a look at our revenue by brands, which is interesting to take a bit of a look at the big growth that we saw in this quarter was obviously the white label into the German and U.K. markets. So that's the blue color you can see in the graph there. CherryCo sales were up by 10% for the quarter, largely driven by our supply. So we had -- previously had some supply challenges to get enough product into the growing demand within that budget category. We sold for that now. And so we saw a small increase. It is a competitive market in the budget category compared to when we launched that brand a year ago, but a small increase there was positive for us. And while off a low base, you can see the small yellow line in the Q4 bar graph there that shows we're seeing some good growth in Lush Labs as well. So it generated about $100,000 of sales for the quarter in Q4. This is a slide we've had in these decks now for the last 3 or 4, and it's a good way to track and trend our net cash flows from operations. Overall, for the quarter, we had a net cash outflow of around about $100,000 -- sorry, $800,000 for the quarter. This did include some historical liabilities that we inherited from Health House and was part of the deal when we acquired that business. And it also saw an increased inventory level for us where we needed to ensure that we had enough supply in the system to keep up with demand as well. So all in all, we think a solid result given the amount we had invested into inventory and to cover those historical liabilities of Health House. Again, a slide that a few of you have been on my presentations would have seen before, but it's 1 in which that really talks to, I believe, the value as a business that we hold. And I think that the key here being if we look at our net tangible assets, so the black bar on the graph, and we can see that a big chunk of that net tangible asset position being well over $70 million, but a big chunk of that is actually property assets. So we have a minimal long-term debt position of just over $3 million with NAB loans extended through till June 30, 2027. And we have the property assets down in Busselton in Western Australia, and we have large property assets up in Denmark that we own debt free, as I said at the start of this presentation. Those sites have put us in a -- particularly the property alignment of our tangible assets put us in a very strong and unique position when we compare ourselves to the industry and coupled with a top line 40% growth, believe that it represents significant value. Cash at bank for the end of 31 March was $2.4 million. And as I said, the value here, if we look at our market cap at the moment, with a net enterprise value of only 1x revenue, which would be really low valuation for a company with the upside that we have, we believe the growth that we had, and the opportunity in Europe, coupled with the tangible assets we have, which are really in property. So again, we still believe that whilst there is a really inflection point happening in the medicinal cannabis market globally, we do believe we just continue to execute on our strategy and there is a recovery coming for this industry. I think if you removed medicinal cannabis from this presentation, and just looked at the fewer fundamentals of our business, our valuations would be very different. So we understand that we know that we're driven towards continuing to execute on our strategy, and we know there'll be correction in this market, and we truly believe that we're in the strongest or 1 of the strongest positions globally to capture that recovery in this market when it comes. We'll jump around now into a few of the key countries, which are really relevant for our shareholders to have a look at. The German market is obviously 1 that the global spotlight is on at the moment where we have this enviable position where we have a 30-tonne sites sitting in Denmark sitting just 2 hours from the border of the fastest-growing medical market by a country mile globally. So that, as I mentioned, the demand that we're seeing into our orders and fixed purchase orders out of that site are really significant and covering a big chunk of the rest of this calendar year and really prompting us to look at some growth opportunity into that site. But the German market, we've seen, yes, 72 tonnes. You can see in that graph between the last 2 quarters, there's been a 53% increase in imported cannabis flower. So a significant growth. We do expect to see demand to continue to grow. We, as a company, have been really focused on not only supplying into white label into partners into that market, but driving our own brand into that market, and I'll talk a little bit more about that in this presentation. But we are looking to launch a number of products under the CherryCo brand into the German market at a big conference in a couple of months called Mary Jane, which is really exciting for the company, and it's been a big work for the team. I think the other thing to note on the German pathway is that there has been a change in government and the governing coalition has actually retained the pathway, the existing pathway, which is really favorable for Little Green Pharma, where it's still a medical pathway for a patient to access the script. But obviously, they're no longer scheduled THC as a narcotic, which is really what's driven this growth from June last year when that change came into place. And the other point on this slide is really just talking about -- is having a look at the Canadian economy and what the size of this potential market could be as we begin to see growth into our key markets, obviously being Australia, Germany, U.K., French and other markets in Europe. But we can see that the legalized cannabis pathway in Canada actually created $7.4 billion to the Canadian economy. So that's bigger than potash, which is -- which for those that know, Canadians are the largest potash producer globally, bigger than the video game market, bigger than wineries, breweries and distilleries, bigger than gold, silver and mining, bigger than forestry, bigger than fishing. So it's -- we know this is going to be a large industry. Yes, the Canadian market has evolved in a way that perhaps has been really challenging for companies to navigate. But what it does tell us is that this is a big industry. And what we can do is sit back and then look at the markets we're active in, say, there is -- we're emerging -- they're still emerging, there's still significant growth even in the Australian market. The French market, we've spoken a lot about, and we've invested a lot of time into this market over the last 5 years. So we've been a part of the French trial, which is now just in another extension period through to the March 31, 2026, and that will give uninterrupted supply to patients that are on that trial. That pathway has been revenue generating and profitable for us now for a number of years. And we are now in the late stage process of delivering dossiers to the French government and our expectations are that we'll be ready to supply into that market under a legislated medical market from early next year. And for those that haven't heard me talk on this earlier, the bid that really excites us about this market, there's a few things, but we've got 65 million people in that country, an indicator of potential market size in the country is the elicit or recreational adult-use cannabis, and it's very high, 1 of the highest in the world in France at 14%. And on top of that, it will be a very regulated market. So our dossiers, we believe, will give us an advantage to be 1 of the first movers, if not the first. And the product we believe will be fully reimbursed for patients as well. So that advantage to get into a market that's fixed price is fully reimbursed first to market will be even more significant than we had originally hoped for when we began to look and invest into this market. So we're really excited with the coming quarters to get that dossier in and obviously even more excited to see what happens next year. Quickly touch on the Spanish market, but we hold a small percentage in a Spanish cultivation operation. And so via that partnership with this group, we stayed really close to this market. As it looks to be evolving, it looks like it may actually be similar to the French market. So the Spain submitted to the European Commission in January this year for their decree. We expect to hear back from that sort of mid this year, maybe July, August. And then as soon as 3 months later, there could be an agency set up to govern this, which would mean access or limited access for patients in that country. So the pathway looks to be, again, very medically focused, that's very dossier driven, which suits us. That's 1 of our real key points of difference as a company. So we're keeping a really close eye on the Spanish market as well. So Health House, a quick update on Health House. So we're now several months into the acquisition. It's been a really, really positive experience for us, both on a cultural fit for the team that we acquired. We knew the Health House business for a long time. They will run at 1 of our primary wholesalers in the market. So understanding the business was relatively simple. They're based here at WA, just close down the road from our Little Green Pharma head office. So the integration of the brand, the people has been very straightforward actually and really, really positive. The broader fit with the customers has equally been really positive as well. So -- obviously, we are a brand representing a brand in market, and we're now a wholesaler. So there was obviously some hesitation in what that conversation would look like with the existing brands at Health House, but all in all, it's been really positive. So we kept almost all of the existing brands and we've got a few other brands interested to come and work with us. So it really has made a really good fit for our vertical integration strategy, and we do see some really good opportunity to provide something that's a bit unique and different for the wholesaling part of the industry here in Australia as well. So it's been really positive. We'll continue to look at new parts of the market. So 1 of the things that we are working on very hard at the moment is another new brand launch, and we're segmenting the market, as we've spoken about a lot previously. So this segmentation will really enable us to target parts of the market, this next 1 that we'll be announcing relatively soon, will be a part of the market that we believe is underrepresented and underutilized in the medicinal cannabis space. So some really exciting news to come there that's targeting really a demographic that we think will be not sort of the big numbers we saw with the CherryCo launch just targeting a budget part of the market, but 1 in which we think will provide some really good growth in the coming years. The other thing to note on this slide is that we were shortlisted for the Canopy's Awards of 2025 for Company of the Year, Business Leader of the Year, the Best Place to Work, and Best Education or engagement initiatives. So we're thrilled to have been shortlisted. It's a great accolade to the team to be shortlisted for those, and the announcement of those awards will be this month, in fact, next week. So we're really hopeful that the work that we've put in will be rewarded, but yes, certainly really happy to be shortlisted as well. The QUEST initiative has been something that -- for those who follow us would have seen our announcement last month on the 4th of April, where we published our 12-month results from the QUEST study. Now this study for those that aren't familiar, is the largest long-term and ongoing study looking at quality of life using medicinal cannabis in the world. And so the results we saw were quite phenomenal. So we had over 2,300 patients at 12 months, and we saw clinically meaningful improvements in quality of life, fatigue and sleep, and we saw significant reductions in anxiety, pain, depression and sleep disorders. So over -- like a phenomenal result in terms of the data that we capture. And our job now is to ensure that this information is fed back to doctors and to the whole ecosystem across the world to show that this -- our products, these are now Little Green Pharma products that were tested and used and analyzed in this research that's now published, and we still believe there's significant growth. And whilst we live in the bubble of medicinal cannabis here in this country, and we've seen huge growth in volume of patients and also doctors willing to have a conversation with their patients, we still believe there's a huge percentage of health care practitioners that still need to see more data. So the reason why we invested in this initiative and continue to invest in this initiative is because we believe that, that data is critical to show these doctors, not only on behalf of Little Green Pharma, but for the industry. But in this case, it's obviously using our products. So really positive results. Quick update on Reset Mind Sciences. So the clinical study that we've been running has made really good progress with patients having completed the first -- dosing component now of the study, and then we now move on to the 12-month follow-up, so 1 patient has come all the way through. The clinical outcomes we've seen, albeit we haven't obviously progressed through to final results across the cohort but we've seen some really, really strong favorable results as we expected. And then more recently, the Department of Veterans Affairs actually confirmed that they will be funding MDMA and Psilocybin-assisted therapies for veterans with posttraumatic stress disorder and treatment of -- treatment-resistant depression here in Australia. So that's a significant opportunity and another significant milestone for Reset Mind Sciences. Not a big update really on this slide since we presented previously. We continue to have the support of Thorney Investments, holding 19.7% of the company, and we continue to have a strong board ownership of 13%, which really aligns the decisions of the Board with the direction and best interest of all shareholders. So I think looking towards the next 6 months, for us, this is again really about just delivering on our strategy. We do believe we've been executing well on our strategy, and for us, that strategy is largely driven by the few points on this slide. The vertical integration with the further development of synergies within Health House will be critical for us. The continued supply to meet that rapid demand into the German and U.K. market will be significant. As I mentioned, we'll be launching our own products into the German market in June into the Mary Jane conference. That is sort of a 12-month process to get to that point. So that's a significant milestone for us in a few months. The French part of our business will really begin to hit its straps in the next 6 months, so we very heavily focused on execution there. The segmentation of the market and looking through that market and looking for new opportunity particularly in those more established markets like we here in Australia will continue to be a big part of our strategy in the next 6 months. And we will, as we've said many times, we'll continue to look for consolidation opportunities in this market. We absolutely believe that we're in a shakeout period of the market. We firmly believe that we're well positioned to provide a good consolidation vehicle, and so we have been and will continue to be in a number of conversations and look at opportunities there. So certainly an exciting 6 months ahead. Thanks, David. I think that might be it for me. I'm happy to take some questions.

Thanks, Paul. A number of questions have come through. So we might just jump straight into them, but I will remind people if they do have any questions, just submit them using the Q&A button on the screen, and we'll get through as many as we possibly can. Couple of questions. So revenue was flat this quarter. How should investors interpret this performance given the strong March results?

Yes. I think like I said in that presentation, David, probably the quarter would have been well skewed by a cycle of a low January. If we go back on the last 3 or 4 Januaries, we saw exactly the same thing. And it is largely driven by -- but we still rely on doctor's writing scripts to generate a sale, of course, in this market. So we see in January that a lot of the doctors have that sort of almost a Christmas to Australia day period of leave -- so we expected. So it wasn't an unexpected result in January. We expected to have a slower quarter in this quarter, but we had a really strong $4 million of sales, biggest ever month in March. So we really think that set us up really well for the start of the next financial year and kicking off into April.

What's driving the growth in European flower sales? And more importantly, is it sustainable?

Yes. Look, I think Germany and the U.K. is really what's driving that at the moment. I think the white label sales into our partners into both those markets, primarily the German market is strongest as we saw on that slide, a 53% increase from the previous quarter in total imports into that market. So we're playing a significant role into a few key players up there. Will we see 50% growth quarter-on-quarter? Of course, not. That's never going to happen in any market. But we do think that if we look at the volume and the demand at the moment that there is some significant growth coming, but we are preparing ourselves to be more vertically integrated with our own products and supply chain inside the German market, which is why we're launching the CherryCo products into that market in a couple of months. So yes, that is largely driven by those 2 pathways.

The question here, if the Australian cultivators guild is successfully enforcing the government's hand in limiting imports, how will that impact LGP?

Yes. Look, I think, the limitation of imports is a really interesting question, and there's probably a few layers to that. I think we do take the view that, that will be very challenging, particularly if you think about the fundamentals of the supply, we still have 80% of the Australian volume coming from the Canadian market -- 81% was the last FOI percentage, which is significant and 50% of the total exports from Canada go to Australia. So that is the pathway that we're seeing into this market in the majority. Now if we were to shut down the other parts of that import, 80% of the total imported volume, would there be enough supply for patients? And what sort of political issue would that create for politicians in this country? I mean, I'm not close enough to the politics of that. But what I can tell you is that this industry is driven by patients. So yes, there will be some impacts if that was to be successful. We're keeping a really close eye on that. We obviously have supply here in our Australian pathway, and we have a strong demand. For us, the future of our Danish site really would mean that we'd be delivering that product into the European operation, and our Australian operations that we're producing to the Australian operations. So ultimately, I think we're probably better positioned than most if that was to happen, but I'd be relatively skeptical given the patient-driven focus this market it's in.

Is the company's financial position and its quest for profitability improving as fast as you need or would like it to?

I think we always want to see -- in any business we'd want to see more and more growth, particularly on the profitability side. I think for us to get a result of a 40% top line revenue growth for the year is, as I said, an outstanding result for the team. We would like to be in a stronger cash position and I think all businesses would say the same thing. But we've got levers in place to manage that, and we really do think that we've been able to show in the last few quarters that we've been able to manage that off a relatively lower cash position. And we've got a few levers moving forward to see us continue to grow that strength of the business. So yes, like I think the focus of the business has been very focused on the cash flow positivity of the company, we continue to make steps towards that. We've had some better quarters but the top line growth has been really important. And we do believe that -- the other big thing for us has been managing inventory, like I said before, is having enough supply of inventory into a growing demand of a market, does have a bit of a drain on the cash position, but it has a result of returning that several months later. So it's more of a cash flow position for us, but we believe we're really well set up now for growth into this next financial year, both top line and bottom line.

And just touching on that, sort of maybe expanding a bit further, sort of a separate question, but at the same vein. How are you managing working capital and liquidity? Is that something that's sort of a daily focus?

Yes. I mean daily or weekly, it's something that we're very working with the finance team very, very closely as all businesses should at any point in time, but certainly, given our position, it's been a focus for us. Certainly on a weekly basis, we're taking a really close look at that. We're looking to sharpen up our payment terms. I think if you go back on 1 of our slides and you see our ability to actually collect our cash each quarter and each month has just got stronger and stronger over the last 12 months. So it's been an active plan of ours to ensure that we've done that, and we've seen the success of that. And we continue to work with our partners to ensure that we can be good partners with the people that we work with and solid business partners but drive the cash flow requirements for the business at the same time.

Question here in regards to Health House and the integration of that business. When do you expect to see the material benefits start to drop for LGP?

Yes. I think we -- I mean we've seen already a big part of our wholesaling pathway transition into Health House. Health House is a business that has got a legacy business, been around for a long time. They essentially were at a level where they're really covering their costs. And so for us, we had a cost to store and wholesale our products through third-party. So a portion of that wholesaling now comes in-house. So on average, I think our wholesale costs across 4 or 5 wholesalers has been in the 20% to 25%, if you look historically over the last 12 to 24 months. So we will bring that margin to the extent that we move our stock through Health House, we'll bring that margin back in as additional margin for Little Green Pharma. However, we have been on record and we continue to be on record to say we will work with other third-party wholesalers because they provide a critical part of the ecosystem here in Australia as well.

Can you comment on the regulatory developments in France? And how is LGP positioned for that market?

Correct. Yes, absolutely. So the pathway for the French market will be -- we expect to hear in the coming months that there will be an opening up of the medical pathway from early next year. So we are preparing as a company to submit that dossiers, which are very complex Part 3 CTD dossiers that are part of any typical drug submission. And that is to -- the part of that submission will enable our products to be approved. And then our expectation, as we said at the start of next year, there will be a full legal medical market inside the French market.

And just sort of expanding on the EU a bit further. And this question relates to EU market growth. What is the sort of approximate percentage share of total revenue at, say, 2030 that is forecast for revenue derived from EU market. So what percentage of the LGP business do you think in 5 years from now will actually be the EU business?

By 2030?

Yes. I'm going to hold you to...

I mean, that's a difficult one. What we would expect to see you saw in that graph on 1 of the slides where we saw the annual European versus Australian sales was beginning to trend towards the European. It's still a long way off the Australian base that we have, but I expect to see that difference grow year-on-year and year. So 2030 is a long time away, 4.5 years. It's not -- it's conceivable that the European growth would be bigger than the Australian growth, and I think that's just pure fundamentals. And you look at the size of the total market inside Europe, if you look at the German market with the size of the population size, the U.K. market, the French market, the Nordics market, which will open up the Spanish market, you've just got a much bigger population pool. So if you -- the way we look at the total size of the market is probably aligned to what we've seen here in Australia. And so the growth that we see and the transition that we've seen from -- at obvious patients to medical patients that have been self-prescribing but haven't actually had the opportunity to go and talk doctor and get a script. So that transition we expect to see. So we think it could be in the 5% to 10% of every population, and we believe that we're well positioned. In some countries, we're best positioned to actually capture market share in those countries within that time period of 2030. So yes, all of those things would lead me to assume that by that point in time, Europe would be a much bigger operation for us.

And are the markets outside of the EU and Australia that you're starting to open your eye to have a look at that are emerging in maybe 5 years behind or a period behind to well-established markets where you could use the strong beachhead you've set up in these 2 jurisdictions to potentially enter into those markets as well?

Yes, for sure. I mean I think what we -- our goal for our company has been to focus our growth on global markets. And for us, there's fast-moving markets like the Australian, German, U.K. market. And then there's -- the markets that are harder to get into that have these really high benchmarks of quality. And the Danish market was one, the Italian market was one, the Polish market is another 1 I haven't spoken about today, but that's a significant and difficult market takes years to get into that market. And for that reason, there's only, I think, 12 or 14 products in that market and ours being 1 of them. The French market being the obvious one. So we actually love those markets that have a much higher watermark of quality expectation because that really is our -- that regulatory know-how, that quality expertise is our competitive motto. So yes, there's other countries we're looking at, at the moment that we think are probably another 3 or 4 or 5 years behind where we were in the French discussion that we are actively having a look at. Having said that, our job here to do is to show growth year-on-year for our shareholders. So we ensure that we dedicate a big chunk of our focus to those fast-moving markets as well of Australia, U.K. and Germany.

A couple of questions here in relation to M&A, and you may not want to talk about them. But if you were to look at an acquisition in Australia, what type of company would deliver the best synergies? And there's another question here, which is probably a bit left field. So when we're talking M&A, we're working on the basis that Little Green Pharma is wanting to acquire something. But is there that -- we're starting to see the market sort of come back into flavor from an investment point of view, both in North America and Europe and others and the footprint you've created. Do people look at the Little Green Pharma business as an M&A opportunity? And I don't -- given nothing has been announced, expect you to answer that directly. But I suppose the first part is, what's the perfect business that you may look to acquire, if any, and do you keep your eye open to other opportunities to potentially grow Little Green Pharma's brand, both here in Australia and internationally?

Look, I think the deal flow of M&A opportunities in this shakeout period is significant. The inbound conversations that could we had -- you could probably end up spending almost all your time just focusing on that. So we have to be really, really strategic in what we're looking for. And without getting into the detail for us, supply chain integration is important for us. Geography is important for us. So we're looking at some of those key markets, not just Australia in a lot of our reviews. And the other obvious potential 1 is for us, we've got this big Danish site with capacity to produce another 15 tonnes of dried finished flower, and so that cost base for us every time we go up by another 100 kilos or another ton, the cost base -- the incremental cost base for us is really low, like to the point where we're globally, really globally competitive. We believe we're already pretty close. But as we go, we don't need a new site manager. We don't need any quality manager. We don't need to spend the money on new infrastructure. So the cost of -- incremental cost base per gram is insignificant, comparatively, which gives us the opportunity to work potentially with other brands that the majority of the Australian brands, there's not many suppliers that cultivate and have a brand. There's a handful. But a big chunk of the market is really sourcing product from elsewhere. So we've got that organic capability to deliver those products into other brands. So that is an obvious one -- for us to be looking at as well, more vertical integration and geographically, giving us a leg up into some of those countries where we've been perhaps a bit slower in pushing our brand and our products into as well. So a number of different areas there. To answer the question, do we think there's a much bigger consolidation play happening at the moment and happening in the next few years for the broader industry? The answer is definitely yes. Would we look at opportunities that give our shareholders the maximum opportunity for this industry? I think if you look at that second last slide, we've got 13% shareholder ownership at a board level, which means that we are aligned to shareholder interest. So of course, we would look at opportunity. And are we well positioned as a company for other groups to look at? I think there's no doubt about that. I think we feel a really strong and solid and trusted reputation, not just in Australia, but I would say globally in the medical side.

Looking forward, from an investor point of view, you touched on it through the presentation. What are the markets over the next quarter, 2 quarters that investors should be focused on if they're measuring success for Little Green Pharma?

Yes. I mean it's probably linked to the execution of strategy on that last slide for us. There will be constant delivery of into particularly the scale and size of our purchase orders into the European market and our ability to do that. Launching of our new brand, our own brand into the German market in June, submission of the dossiers and progress into the French market, partnership opportunities, brand opportunities here in Australia and broader M&A activity that we think that we'll see both in this market and the European market.

Thanks, Paul. You've handled all the questions that have come in. I'm not going to say they're all easy, but that's the point of doing these webinars is making yourself available to shareholders and investors to answer any questions that they want to throw at us. So I appreciate you taking the time to not just present the Little Green Pharma investor deck and proposition, but to answer the questions that investors want to know. So, Paul, thanks for your time.

Thanks, David, and thanks, everyone, for tuning in.

And thank you, everyone, for your time to tune in and listen to the presentation and submit questions as you felt appropriate. Contact details for the company are on the screen, and should you like to follow up with Paul directly, I've got no doubt, he'd be more than happy to take your call. So thanks, everybody, and have a great day.