IMC Expects Accelerated Growth in Germany from the Country's Groundbreaking Cannabis Legalization

Rhea-AI Summary

IM Cannabis Corp. (IMCC) anticipates strong growth in the German medical cannabis market after the regulatory rescheduling of cannabis to a regular prescription. IMC Germany achieved 180% growth in 2023, surpassing market growth. The company is well-positioned with infrastructure, certifications, and supply agreements to capitalize on the evolving German market.

Market Research Analyst

The rescheduling of medical cannabis in Germany marks a transformative change in the healthcare and pharmaceutical sectors, particularly for companies like IMCannabis. As a market research analyst, it is evident that the company's strategic positioning and prior year's growth of 180% indicate a robust operational framework capable of capitalizing on market expansions. Unlike the broader market's growth of 20%, IMC's significant outperformance suggests that they have effectively leveraged their product offerings and market presence to secure a dominant position.

With Germany being a key market for medical cannabis in Europe, the regulatory shift could serve as a catalyst for increased demand. IMC's established infrastructure, including EU-GMP certification for repacking bulk cannabis and EU-GDP certified logistics, provides a competitive advantage in terms of quality assurance and supply chain efficiency. These certifications are critical in the pharmaceutical industry, ensuring that products meet strict health and safety standards and are distributed effectively.

However, the company's future success will depend on its ability to maintain supply agreements and manage increased competition as the market becomes more accessible. Furthermore, while the company's current growth is impressive, investors should monitor the sustainability of this growth, considering market saturation and regulatory compliance costs that may rise as the industry matures.

Financial Analyst

From a financial perspective, the rescheduling of medical cannabis in Germany and the subsequent market growth present a notable opportunity for IMCannabis. The company's impressive growth figures and market share capture reflect strong financial health and strategic market positioning. However, investors should be cautious and look beyond the surface-level growth figures. It is critical to analyze the company's profitability margins, cash flow statements and balance sheets to get a comprehensive understanding of its financial sustainability.

Additionally, the company's ability to deliver products to pharmacies within 24 hours is a significant operational strength that can lead to cost efficiencies and customer satisfaction, potentially translating into recurring revenue streams. However, the influx of new patients and increased accessibility may also attract new entrants and increase competition, which could pressure prices and margins.

Investors should also consider the potential impact of international trade policies, currency exchange fluctuations and the legal landscape's stability on IMC's financial outcomes. As the German market evolves, these factors could influence the company's performance and should be included in any thorough financial analysis.

Legal Expert

The legalization of cannabis in Germany represents a significant shift in legal frameworks governing controlled substances. For companies like IMCannabis, this presents both opportunities and challenges from a legal standpoint. Compliance with EU-GMP and EU-GDP standards suggests the company is well-prepared to navigate the complex regulatory environment associated with medical cannabis.

However, as the market grows and becomes more competitive, IMC will need to remain vigilant in adhering to evolving regulations and managing legal risks. The firm's ability to maintain compliance will be a key factor in its capacity to sustain its market lead. Moreover, as the legal landscape for cannabis continues to evolve globally, the company must stay informed of changes not only within Germany but also in any other markets where they operate or plan to expand.

Investors should pay attention to the company's legal and regulatory affairs, as any missteps in this area could lead to significant liabilities, affecting the company's reputation and financial position. The legal expertise within the company's management will be important in ensuring that growth is not hampered by regulatory hurdles or legal controversies.

By rescheduling medical cannabis, from a narcotic to a regular prescription, the German medical cannabis market is expected to deliver strong growth, providing IMC Germany with a unique opportunity to further accelerate growth in 2024 after delivering 180% growth in 2023

TORONTO and GLIL YAM, Israel, March 25, 2024 /PRNewswire/ -- IM Cannabis Corp. (CSE: IMCC) (NASDAQ: IMCC) (the "Company", "IMCannabis", or "IMC"), a leading medical cannabis company with operations in Israel and Germany, is welcoming the German government's final approval legalizing cannabis last Friday, as well as the landmark medical cannabis act that has the potential to facilitate access for many new patients as of April 1^st.

The regulatory rescheduling of cannabis along with the expected market growth, provides IMC with a unique growth opportunity.  In Germany, IMC:

• is #1 in sales per SKU within the German flower market¹
• grew +180% in 2023 while the market only grew +20%¹
• has the highest growth in the German market¹
• is the #5 cannabis distributor in Germany¹

"We have been working toward this moment for the last 4 years," said Richard Balla, CEO of IMC Germany. "We have the entire infrastructure in house.  We are EU-GMP certified to repack bulk. We have an EU-GDP certified logistics center to store cannabis and are delivering IMC Cannabis to any pharmacy in Germany within 24 hours. Our team has extensive cannabis as well as pharmaceutical experience. We have all the necessary supply agreements in place to support accelerated growth. We believe that we are well positioned and are looking forward to growing significantly as the German market evolves as a result of the new legislation," concluded Balla.

¹ Insight Health December 2023

About IM Cannabis Corp.

IMC (Nasdaq: IMCC) (CSE: IMCC) is an international cannabis company that provides premium cannabis products to medical patients in Israel and Germany, two of the largest medical cannabis markets. The Company has recently exited operations in Canada to pivot its focus and resources to achieve sustainable and profitable growth in its highest value markets, Israel and Germany. The Company leverages a transnational ecosystem powered by a unique data-driven approach and a globally sourced product supply chain. With an unwavering commitment to responsible growth and compliance with the strictest regulatory environments, the Company strives to amplify its commercial and brand power to become a global high-quality cannabis player.

The IMC ecosystem operates in Israel through its commercial relationship with Focus Medical Herbs Ltd., which imports and distributes cannabis to medical patients, leveraging years of proprietary data and patient insights. The Company also operates medical cannabis retail pharmacies, online platforms, distribution centers, and logistical hubs in Israel that enable the safe delivery and quality control of IMC products throughout the entire value chain. In Germany, the IMC ecosystem operates through Adjupharm GmbH, where it distributes cannabis to pharmacies for medical cannabis patients. Until recently, the Company also actively operated in Canada through Trichome Financial Corp and its wholly owned subsidiaries, where it cultivated, processed, packaged, and sold premium and ultra-premium cannabis at its own facilities under the WAGNERS and Highland Grow brands for the adult-use market in Canada. The Company has exited operations in Canada and considers these operations discontinued.

Disclaimer for Forward-Looking Statements

This press release contains forward-looking information or forward-looking statements under applicable Canadian and U.S. securities laws (collectively, "forward-looking statements"). All information that addresses activities or developments that we expect to occur in the future are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect", "likely" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are based on the estimates and opinions of management on the date the statements are made. In the press release, such forward-looking statements include, but are not limited to, statements relating to statements relating to compliance with Nasdaq's continued listing requirements, and timing and effect thereof and the potential for an extension to regain compliance; Company leaving the Canadian cannabis market to focus on Israel, Germany and Europe.

The above lists of forward-looking statements and assumptions are not exhaustive. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated or implied by such forward-looking statements due to a number of factors and risks. These include:  any failure of the Company to maintain "de facto" control over Focus Medical in accordance with IFRS 10; the failure of the Company to comply with applicable regulatory requirements in a highly regulated industry; unexpected changes in governmental policies and regulations in the jurisdictions in which the Company operates; the Company's ability to continue to meet the listing requirements of the Canadian Securities Exchange and the NASDAQ Capital Market; any unexpected failure to maintain in good standing or renew its licenses; the ability of the Company and Focus Medical (collectively, the "Group") to deliver on their sales commitments or growth objectives; the reliance of the Group on third-party supply agreements to provide sufficient quantities of medical cannabis to fulfil the Group's obligations; the Group's possible exposure to liability, the perceived level of risk related thereto, and the anticipated results of any litigation or other similar disputes or legal proceedings involving the Group; the impact of increasing competition; any lack of merger and acquisition opportunities; adverse market conditions; the inherent uncertainty of production quantities, qualities and cost estimates and the potential for unexpected costs and expenses; risks of product liability and other safety-related liability from the usage of the Group's cannabis products; supply chain constraints; reliance on key personnel; the risk of defaulting on existing debt and war, conflict and civil unrest in Eastern Europe and the Middle East.

Any forward-looking statement included in this press release is made as of the date of this press release and is based on the beliefs, estimates, expectations and opinions of management on the date such forward-looking information is made. The Company does not undertake any obligation to update forward-looking statements except as required by applicable securities laws. Investors should not place undue reliance on forward-looking statements. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Company Contact:

Anna Taranko, Director Investor & Public Relations
IM Cannabis Corp.
+49 157 80554338
a.taranko@imcannabis.de

Oren Shuster, CEO
IM Cannabis Corp.
info@imcannabis.com

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SOURCE IM Cannabis Corp.

What market growth did IMC Germany achieve in 2023?

IMC Germany achieved 180% growth in 2023, outpacing the market growth of 20%.

What is IMC's ranking in the German flower market?

IMC is #1 in sales per SKU within the German flower market.

Who is the CEO of IMC Germany?

Richard Balla is the CEO of IMC Germany.

What certifications does IMC possess?

IMC is EU-GMP certified to repack bulk and has an EU-GDP certified logistics center.

How quickly can IMC deliver cannabis to pharmacies in Germany?

IMC can deliver IMC Cannabis to any pharmacy in Germany within 24 hours.

What position does IMC hold in the German cannabis distributor ranking?

IMC is the #5 cannabis distributor in Germany.