REG - Hellenic Dynamics - Business Update

Hellenic DynamicsAnnouncement

06/06/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230606:nRSF7286Ba&default-theme=true

RNS Number : 7286B  Hellenic Dynamics PLC  06 June 2023

Hellenic Dynamics plc

("Hellenic Dynamics" or the "Company")

 

Business Update

 

London, 06 June 2023: Hellenic Dynamics plc (LSE: HELD) is a medical cannabis
cultivator specifically focused on the cultivation and supply of
tetrahydrocannabinol ("THC") dominant strains of medical cannabis
flowers destined for the rapidly growing medical cannabis markets across
Europe. In December 2022, Hellenic Dynamics became the first medical cannabis
cultivator to list on the London Stock Exchange's main market for listed
securities.

 

Highlights

 

·    Cultivation and Equipment

·    Details of adapted Strategy to the changing dynamics of the European
medical cannabis market

·    Update on GMP Certification

·    Renewable Energy Update

 

Hellenic Dynamics' Business Model

 

Hellenic Dynamics' core strategy is to develop and operate its 40,000 square
metre cultivation area for THC-dominant medical cannabis permitted by its
licence from its 195,506 square metre facility located near Thessaloniki in
Northern Greece.

 

The facility benefits from a relatively low cost base resulting from a
comparatively low cost of power and one of the lowest labour rates for skilled
and semi-skilled labour in Europe as well as having its own running water
supply, meaning that utility costs are significantly below standard market
rates for other cultivators.   The active THC cultivation area is one of the
largest in Europe, capable of producing over 54,000 kg of dried medical
cannabis flowers per annum when in full production.

 

The location of the facility also enables Hellenic Dynamics to easily export
its THC dominant medical flowers to any of the 25 countries in Europe
that currently allow medical cannabis prescriptions to patients, in a market
expected to reach €43.3 billion per annum by 2027, twice the size of the
current north American and Canadian markets combined.

 

Hellenic Dynamics' adapted strategy

Hellenic Dynamics is currently on track to have its first cultivation underway
in late summer 2023.

 

Hellenic Dynamics is a medical cannabis cultivator. As the industry enters
'cannabis 2.0' which has seen a shake-up of the medical cannabis market,
through its agility the Company intends to move with market conditions and
demand. This has led to a review of the Company's cultivation strategy which
will see Hellenic Dynamics harnessing its scale and low cost operating model
in a way that it anticipates will accelerate revenue generation and provide an
opportunity to itscustomers. Such a strategy has not yet seen in the cannabis
space to date. This modified strategy and operating model, details of which
are set out below, is different and disruptive in comparison to the Company's
peer group and is designed to match the rapidly evolving regulated medical
cannabis market in Europe.

 

As the medical cannabis markets across Europe are now defining the industry
standard for the supply of medical cannabis products from cultivator to
patient, the certifications for these products is also evolving. Hellenic
Dynamics' strategy contained within the Company's prospectus was to gain both
Good Agricultural and Collection Practice ("GACP") and a EU Good Manufacturing
Practices ("EU-GMP") certifications. EU-GMP is the most intensive
certification for any medical cannabis cultivator to achieve from a capex,
opex and time to issuance perspective, with very little advantages for end
sales price of products. As the industry enters 'cannabis 2.0' many medical
distributors have built their own EU-GMP facilities within their licensed
distribution buildings across Germany as have other potential customers in the
other markets that Hellenic Dynamics wishes to sell its products into. For
this reason, the Company has decided not to invest considerable funds and time
into the construction and certification of an EU-GMP facility in the current
phase of its development. Hellenic will instead concentrate on the cultivation
and supply of GACP flowers to its EU-GMP certified distributors, saving the
Company considerable time and expense. This again shows the evolving nature of
the European cannabis markets.

 

The Company will release more details of its adapted cultivation strategy in
due course.

 

Cost savings

In addition, since the Company's last business update, Hellenic Dynamics has
managed to secure significant discounts from its equipment suppliers and has
also managed to secure unused second hand equipment, where possible, to keep
costs as low as possible while ensuring all equipment is of the highest and
modern standards throughout the facility.

 

The Company already benefits from a relatively low cost of power, however
Hellenic Dynamics is in advanced discussion with suppliers of solar energy
from within Greece to further reduce its cost base. This potential new supply
should bring the Company's energy cost down even lower and provide a unique
advantage to its business model.

 

The Company will update the market on progress with this development in due
course.

 

Davinder Rai, CEO of Hellenic Dynamics, commented:

"Having evaluated the rapidly changing dynamics of the European medical
cannabis markets and seen the challenges and issues that have confronted other
cultivators we are adapting our growth strategy to take advantage of
opportunities which are emerging as a result of such changes. Our approach
will now involve harnessing the scale, low operating cost and expertise at our
growing facility to service the burgeoning demand from end use customers in
our target markets. I personally believe this strategy is the  most
disruptive thing to happen to the industry since its legalisation "

 

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as amended by regulation 11 of the
Market Abuse (Amendment) (EU Exit) Regulations 2019/310. With the publication
of this announcement, this information is now considered to be in the public
domain.

 

The Directors of the Company take responsibility for this announcement.

 

Enquires:

 

Hellenic Dynamics plc
                               +44 (0)20 3818
7850

Davinder Rai
 
davinder@hellenicdynamics.com

 

Cairn Financial Advisers LLP

Emily Staples / Jo Turner
+44 (0)20 7213 0880

 

Peterhouse Capital

Lucy Williams / Charles Goodfellow        +44 (0)20 7469 0930

 

J&H Communications

George Hudson
+44 (0)7803 603130

About Hellenic Dynamics plc

Founded in 2019, Hellenic Dynamics is specifically focused on the cultivation
and supply of THC ("tetrahydrocannabinol") - dominant strains of medical
cannabis flowers, destined for the growing medical cannabis markets across
Europe. Hellenic Dynamics' core strategy is to develop and operate its 40,000
square metre active cultivation licence from its 195,506 square metre facility
located near Thessaloniki in Northern Greece. In full production, Hellenic
Dynamics is capable of producing over 54,000 kg of dried flowers per annum.

Hellenic Dynamics will take advantage of its relatively low cost base
resulting from a comparatively low cost of power, having its own running water
supply and the labour rates for skilled and semi-skilled labour in Northern
Greece.

25 European countries now allow medical cannabis via prescription and the
European cannabis market is expected to reach €43.3 billion per annum by
2027. Sales of Hellenic Dynamics' dried THC-dominant cannabis flowers and
extracts are initially intended for export into Europe's largest market -
Germany, in addition to other European markets including domestically in
Greece.

As the first medical cannabis cultivator to obtain a listing on the main
market for listed securities of the London Stock Exchange, Hellenic is
significantly different to the number of CBD (Cannabidiol) related companies
that have appeared over the recent years. Hellenic Dynamics cultivates
THC-dominant medical cannabis flowers. THC-dominant medical cannabis products
are only available via a medical prescription. Medicinal cannabis has been
approved for use both in the United Kingdom and Germany, plus 23 other
European countries, for conditions including but not limited to  chronic
pain, intractable chemotherapy-related nausea, anxiety, insomnia, Tourette's
syndrome, substance use disorder, multiple sclerosis, IBS, spinal cord
treatment, lack of appetite due to HIV/AIDS, cachexia, anorexia and glaucoma.

 

Caution regarding forward looking statements

Certain statements in this announcement, are, or may be deemed to be, forward
looking statements. Forward looking statements are identified by their use of
terms and phrases such as ''believe'', ''could'', "should" ''envisage'',
''estimate'', ''intend'', ''may'', ''plan'', ''potentially'', "expect",
''will'' or the negative of those, variations or comparable expressions,
including references to assumptions. These forward-looking statements are not
based on historical facts but rather on the Directors' current expectations
and assumptions regarding the Company's future growth, results of operations,
performance, future capital and other expenditures (including the amount,
nature and sources of funding thereof), competitive advantages, business
prospects and opportunities. Such forward looking statements reflect the
Directors' current beliefs and assumptions and are based on information
currently available to the Directors.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDNKABNKBKKPAK