Medicinal cannabis in Germany - Business Report

157 Confidential _______________________________________________________________________________ The company is not yet one and a half years old. Established in September 2018 to import and sell medicinal Cannabis to pharmacies across Europe, Farmako made its first investment in December. Heartbeat Labs and Diemer together invested a single-digit million euro sum in the Cannabis company. Series founder Fahrenholz followed suit in spring 2019 with a "high six-figure sum". The sale has no influence on the research unit of Farmako, which was spun off in July and is now located as Synbionik under the umbrella of Heartbeat Labs, according to the Berlin incubator. Accord- ing to the commercial register, Heartbeat Labs was previously a partner in Farmako together with Farmako founder Sebastian Diemer, Lieferando founder Nikita Fahrenholz and Niklas Kouparanis. The transfer has not yet been entered in the register. For Farmako, Diemer, one of the founders of the company - as with all his companies - had big plans: The start-up was to become "market leader in every European country" and celebrate its eco- nomic success with artificial Cannabinoid, it was once said. But it never came to that: According to a report in Manager Magazin, the start-up presented unrealistic sales figures; scientists said that alleged research breakthroughs in the production of biosynthetic CBD could not be realized according to the state of affairs at the time. After the separation of the research and development department, not much remained of the original company except for the sales department. Today, Farmako states that it has generated a total of 1.6 million euro in revenues since the operational start of the business in March 2019. ▪ Farmako had started with great promise: Just 20 days after the start, six-figure sales were achieved, the artificial production of Cannabis was on the verge of a breakthrough, and the world's largest import deal for 50 tons of Cannabis was completed - to name just a few of the record-breaking announcements of the first months. ▪ Farmako, however, was shipwrecked to secure 50 tons of Cannabis from northern Mace- donia. Legal hurdles caused the project to fail. ▪ In July 2019, the so-called Biosynthesis business was spun off into a separate company un- der the management of Heartbeat Labs. ▪ The fourth largest Cannabis producer from Canada, Agraflora , will take over Farmako. ▪ The takeover has a volume of 15 million euro, which will largely consist of an exchange of shares. Approximately EUR 11.4 million is accounted for by the share deal and 3.6 million euro by the cash component. Agraflora will also replace shareholder loans and provide Farmako with fresh capital.