The Althea Group Holdings Ltd (ASX: AGH) share price is tearing higher today. This comes after the company announced the completion of its first shipment of products to Germany.
Shares in the global medicinal cannabis company reached a high of 56 cents this morning, but have since retreated to 54 cents, up 9% at the time of writing.
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What's driving the Althea share price higher?
According to its release, the company has delivered its first shipment of medicinal oil cannabis products to Nimbus Health, a company that imports and distributes medicinal cannabis products in Germany. The vertically integrated pharmaceutical wholesaler ranks among the top 10 distributors in Germany.
The shipment is worth around $1 million and arrived at the Nimbus facility for distribution. It is expected the medicinal oil cannabis products will be sent to an extensive network of existing partnering pharmacies.
Althea said it would receive payment for products supplied to Nimbus, along with 50% of the net profit.
Furthermore, under an earlier agreement with Nimbus, Althea will also generate its own sales via new and existing customers to avoid relying on third-party wholesalers for repeat purchase orders.
Addressable market opportunity
Althea noted that the German market represented a significant opportunity to invest its resources in. With a population of 82.3 million, the medicinal cannabis market is estimated to grow to €7.7 billion (A$12.22 billion) by 2028.
Althea believes that its partnership with Nimbus puts it in a good position to become Germany's leading medicinal cannabis brand.
CEO commentary
Althea CEO Joshua Fegan welcomed the positive news, saying:
Successfully shipping our first products to Germany is a huge milestone for our European expansion plans and builds on the encouraging results to date from our UK operations.
Germany is a key market for global medicinal cannabis and is currently underserviced in terms of high-quality medicinal cannabis oil products and the education of Healthcare Professionals. Along with exceptional patient care, these are the pillars of our business.
Foolish takeaway
The Althea share price has climbed more than 20% since the beginning of the 2021 calendar year. The company's shares took a minor dip in late January, hitting a low of 44 cents before surging higher.
At the current share price, Althea has a market capitalisation of around $139 million.
