Good morning, and welcome to this Q1 presentation and Q&A with Stenocare. With us today, we have the CEO and CFO. First, there will be a presentation, and afterwards, a Q&A, where the management team will answer questions submitted via Stokk.io. There have already been pre-submitted questions on Stokk.io, and the Q&A is still open so that you can submit questions live as well. I will now hand over the mic to Stenocare to start the presentation. Thomas and Peter, your line is now open.
Thank you very much, and welcome to our first presentation on Stokk.io. We've been looking forward to this day. My name is Thomas. I'm the CEO.
My name is Peter. I'm the CFO.
Together, we will take you through the agenda that was posted on the platform. So first, I will introduce what is cannabis as a business, as a business opportunity. Then I'll, of course, introduce Stenocare, one of the players in the industry that we represent. And then Peter, he will take us through the key messages from our Q1 report that was released this morning. And then, of course, at the end, we'll have the Q&A that Anders was introducing. So if we look at the medical cannabis market, both in Denmark but in Europe as well, what is really important to understand is it's a very young industry.
So if you think about cannabis, it's been around for thousands of years, of course, but as a business, it was not really until 2017, 2018, 2019, that most European countries started to legalize medical cannabis. So that's the starting point. Of course, in Canada and in the U.S., they started 10 years earlier, in different ways, so of course, they are a bit ahead of us. But from a business development point of view, a business maturity point of view, we would still consider the European cannabis industry as young, and therefore, we're also looking at a market that is not fully developed in the way of the opportunity, and the number of patients that are being addressed.
If we look at some of the, the key numbers available from different analysts in Europe and internationally, there's an estimation that one in every 10 individuals that are diagnosed with chronic pain each year, and that's a big number. I mean, we're talking about 10% of the entire population, and if you take Europe, we are 740 million people. So it's really, really amazing numbers that we are looking at that can be addressed with medical cannabis. We've also seen learnings from especially the U.S. and Canada with the opioid crisis, where too many people are being addicted to opioids, morphine, pills, and medicine. And medical cannabis has shown indications that this could be an alternative, either altogether or as a way of de-escalating the use of opioids.
So again, there's a very, very huge opportunity to use medical cannabis in the future. If we look at the European market, you can see on the graph on the right-hand side, this is an estimate from one of the industry analysts we have in Europe called Prohibition Partners, and they're estimating that we'll see a market of EUR 2.1 billion in just three to four years from today, and it's really an interesting growth that lies ahead. We also expect to see more countries legalize medical cannabis. It's important to remember that medical cannabis is a prescription-based medicine. You can't buy it on the internet. You can't buy it in any shop. You need to have a prescription from your doctor, and you need to have the products delivered from a licensed pharmacy.
So that puts a lot of regulations around the product, a lot of security around the product, but also some barriers to enter this exciting market. So I hope this gave an introduction to medical cannabis that we are talking about. So have you... If you've been traveling in countries like Germany, Czechoslovakia, Spain, and you've seen cannabis or CBD in shops, that has nothing to do with medical cannabis, 'cause it's a totally different product that has no comparison, just to be very clear. Let's move on to an introduction to Stenocare and who we are. So Stenocare is a Danish company that we founded back in 2017, at the same time as medical cannabis was legalized here in Denmark. That is our home market.
We was fairly early noted on the stock exchange in Stockholm, and then later on, we moved to Nasdaq First North here in Copenhagen. The Stenocare strategy from day one has been that we see two pillars that is all about how we create value and drive our business forward. The first pillar is that we want to source finished products from leading producers around the world, and we use their products under the Stenocare brand. And then we qualify them. We have their products approved in several markets, and in that way, we were the first to enter a lot of markets because we could quickly introduce products from the first supplier was from Canada, but now we also have suppliers other places in the world.
The second pillar is our own cultivation facility here in Denmark, which is producing high-quality products in an indoor facility that we are finalizing. And the point of having both is, of course, having a broad range of products that we can offer to patients and doctors for different types of treatment, and therefore, we can leverage what other companies are doing. We can pick the leading producers that really have products that doctors are asking for. But we can also scale our supply, our capacity as we enter more countries, as demand grows. So we can scale up and down, and in that way, have a very lean supply chain for our entire operation.
If we look at some of the key results for Stenocare over the last few years, I mean, we were one of the first movers here in Denmark to have all the different licenses from the Danish Medicines Agency to operate, to import, to sell, medical cannabis products, to Danish patients. And since then, all the assets that we have created from a regulatory point of view, from a commercial point of view, and from supply chain point of view, we have moved and expanded into more countries. So we've moved beyond Denmark. We are selling products in Norway, we are selling products in the U.K., we're selling products in Germany, and we have also been selling products in Australia.
So you could say that the early mover advantage and learnings that we have created some really amazing assets that we have been able to extend to new markets. And every time we enter a new market, we learn new things. We add to the assets that we already have, and that opens up new opportunities for the company. If we look at 2023, we had a gross sales of DKK 6.5 million, which was at that point a growth of 170% year-over-year. So that's a very quick introduction of Stenocare and who we are. You can see a few pictures at the bottom side of the slide. There's a picture of our facility headquarters in Denmark.
And then you can see some of our colleagues inside the cultivation facility, and of course, the three products that we currently range in several markets that we serve. So with that, I'll turn over the word to Peter to take us through the Q1 report.
Yes. Thank you. I will just go quickly through the sales, the cost, and our financial structure or financing for now or for the future. If you look at our sales for the first quarter of 2024, it's 1.4 million DKK, and that's actually an increase compared to last year first quarter of 62%. The sale is mainly in the Danish market, and to be noticed, it's without our new mixed THC, CBD product that just arrived in after the reporting period ended. If you take... And that's the other graph on this slide, the realized quarterly gross sales for the last five quarters, the highlighted in green, the bars.
Summarized for the last 12 months, we are showing an increase steadily over the period, as you see. I have also, in that graph, indicated that our guidance for the whole year of 2024, and to the left, to the right, sorry. Based on our experience from the Danish market in 2018 and 2019, and the current market in U.K. and Norway, where we have all three products, the high CBD, the high THC, and the mixed THC-CBD approved, we expect that sale to the Danish market with all three products will grow significantly for the last three quarters of 2024. In our experience, the physicians value to have all these three products available for their treatments of patients.
Also, we expect an increased sale in Australian market with the new product just approved here in the first quarter of 2024, and with our new partner who have a wider reach towards more prescribers, prescribing Stenocare products. And we expect increased sales in the markets where we have three products approved, the U.K., Norway, and in addition to that, Germany. And all that will drive our sales towards the guidance of 15 million DKK. Yes, and then I've to try to, or I will highlight a little about our cost structure. We have operational cost in Q1 2024, amounting to 3.6 million DKK, and actually that is a decrease of 11% from last year.
We operate with a very lean cost structure, and we continue this approach until sales has reached the breakeven level. Just to highlight, there are other external expenses, includes fixed assets such as rent of the facility, safety and safety of the facility, listing costs, insurance, and auditing, things like that, but also variable costs, such as the cost of goods sold, energy, maintenance, et cetera. And compared to the previous quarters, we have managed to reduce these costs even with increased sales. This is due to a successful and continuous optimization of the operation. Personnel expenses, that's the blue color, for the last four or five quarters, are quite stable as we continue to look to work with a very lean organization.
As you can see on the picture to left, even I stand there and helping with the packaging of the materials for Denmark for the Danish market. So everybody has a lot of you know tasks. Yes, if you go further, I just have a little about our capital structure. I have to just focus on that. Our main assets is, as Thomas explained, our production facility in Randers and where we have invested a lot of money. This is a view of our capital structure as per 31st of December last year, and then the end of Q1 2024. In December 2023, we successfully completed a capital raise with the TO1 warrant, and in addition to this, a directed issue.
This resulted in a capital increase of DKK 7.2 million before transaction cost, and the TO1 was the second step in our funding plan, announced May last year. Following this transaction, we completed a refinancing, a partial repayment of the convertible debt in February this year, with repayment of DKK 3.2 million and a remaining debt of DKK 5.4 million. That's what you can see in this graph. This resulted in a reduced balance sheet and a ratio of interest-bearing debt towards market cap, as we speak, of approximately 5%. In our view, this gives Stenocare an optimal financing structure towards the expected breakeven in the end of this year, and in addition, reduced finance cost, financing cost.
Cash as per end of quarter, of the quarter, amounted to DKK 2.6 million, and with the new mixed THC, CBD product introduced and sold in Denmark in April, after the period ended, expected increased sales in Australia and other markets, the estimated cash flow for Q2 will bring Stenocare well beyond the TO2 warrant exercise in June. And the TO2 warrant is then the last and third step in our funding plan, announced last May, May last year. Thank you.
With that, we concluded our introduction and presentation about the market, the company, and our Q1 report, and now it's time for questions.
Perfect. Thank you for that, Thomas and Peter. Let's move directly into the questions, as we have a lot of submitted questions here. So the first question is around the financials in the company. Why is the loss increasing all the time when you should be getting closer to breakeven?
Yeah. Actually, if you see the results quarter-over-quarter, the loss is quite stable and slightly decreasing as that is quarter-over-quarter. EBITDA is reduced from a loss in DKK 4 million in Q1 last year to DKK 3.3 million this year. And, as mentioned, we operate with a very lean cost structure, including the organization. The breakeven then, which may be the real question here, is the right, as I explained before, as increased sales for the coming month, quarters, and with all three products approved in Denmark and also increasing sales in our markets outside Denmark. Yeah.
Perfect. And the next question is: What do you expect from the newly released product with a combination of CBD and THC? How is demand compared to your other two products?
I can do that question. So I think what is important to understand when we develop our product portfolio, it's based on input from doctors in all our markets. What do they need for treatment of their patients? And in general, what we hear is that they need three different types of products. They need a high CBD product, they need a high THC product, and they need a mixture, which is a THC and CBD mixture. And we have that in Norway, we have that in the U.K., and we've had it for some time now. And now we're basically introducing the same third product here in Denmark, which was, just as Peter was saying, shipped to the market back in April.
It's not like we say one product is the most important product compared to other products. It's the combination of being able to deliver a full product portfolio for doctors. So when they sit and have a consultation with their patient, that they have different options, and the same patient might actually need a combination of one or two or three of these products through the treatment period. So in that way, we see the value for Stenocare and for the doctors and patients, is that we have all three products, which we see, and we saw that also back in 2018 and 2019, where we had the three products arriving at the same time.
So I think this is the, this is the reason, and this is the expectation we have. Now, we have a full lineup in Denmark. This is, as Peter is saying, is also gonna drive further growth because, this is what doctors have been asking for, "Please deliver all three to us," and we do that now.
Yeah. The price of Stenocare products is quite high. Do you have a strategy for getting pricing down to be useful for a broader market, or how do you see your pricing strategy?
I actually disagree that the products are high. If you compare to the market numbers that is available from the health agencies in Denmark, the volume of products being sold today is from a source called medicinal cannabis, which is produced by one or two pharmacies in the country. When we look at their prices, I mean, remember, these are the products that sells in highest volume, so you would imagine, "Oh, that must be the cheapest product." No, it's not. Our products is the same price or lower, and it's always been the same price or lower from day one.
So yes, we have had an option or a strategy to lower the prices, and we are, and have been sort of the leader in doing that, in the last three or four years. So I disagree that our products is more expensive. The real question is, why is it then it's more expensive for the patients? This is the real question, and it's a decision made in our parliament that the Danish Pilot Program, where our products belong, they don't get the same subsidy for patients like all the other products. So in that way, it's not really that we have more expensive products, it's just that our products don't get the same high subsidy like other products in the market. So I think that is really, really important to remember.
In the question, there's always a logic that, hey, if we use the same consumer pricing logic like we do for tennis shoes or smartphones, half price will sell more. But that's not the way it works. We need to remember that this is prescription-based medicine. You don't get a doctor to write extra prescription because there's a promotion or half price on a product tomorrow. That's not gonna happen. So, we don't see the market exploding. We've actually, in the Danish market, seen that the products, some of the products, has come down quite significantly over the last 3-4 months. Did that explode the sales? Absolutely not. It didn't do anything.
So it's just to be very clear that, I think we should be careful about thinking our price is gonna fix the world. But to be sure, be clear, we have been very focused on pricing. When we introduced the first product in 2018, we more than cut the market price in half, and we stayed lower than that, and we are even lower than those prices were back in 2018. So with all respect, I disagree that our products is expensive.
Then there's a follow-up question to this question. How do you tackle the issue regarding the reimbursement issue in the Danish market?
Yeah. So this is, of course, a politician, it's a topic for the parliament and our politicians, and it comes down to budget in our health budget. So what we have been doing is, of course, we have been interacting through the channels that are available to us. We have been meeting with the health people or politician that stands for the health area, to explain to them that there's something that is not really working the way it should. We have been giving input for the official evaluation that was completed just around New Year this year. So we try to make politicians aware that there's a challenge on this one. Because in reality, if you look at patients—patients cannot be treated in the same way. There are A and B patients.
The A patients are the ones that get to have medicine from one specific supplier that gets a higher discount. But this is a limited area for limited types of specialists that can prescribe it for limited illnesses. And then the whole idea with the Pilot Program that we have was to open up for everyone that had a need, but these are being treated as B type patients. And this is something we need to change, and we are making our voice heard. We are also talking to the industry, the colleagues that we have, and trying to raise the awareness that this is a problem for Danish patients. Outside Denmark, different story.
Every country has different ways of subsidizing, and in the U.K., there's no subsidy. For example, in Australia, there's no subsidy, so it's different by market. So we shouldn't forget that, even though Denmark with 6 million people, I mean, there's 87 million people in Germany, and almost 40 million people in Australia. So we need to put all the challenges in perspective from a business perspective.
Then there is a question here with quite a few questions in it, so I will cut it up in different pieces. How do you address the increasing competition, both nationally and internationally, for a generic product like yours and the increasingly lower margins associated with it?
Yeah. So I would say that there's different types of products available in the market today. We tend to put them into different categories. The first category is flower products that you smoke as a joint, which is kind of where it all started. In our mind, that's not medicine, and I know from a lot of doctors they don't like prescribing joints for sick people. So what we have been doing is that we've said we need a pharma approach. We need to create products that are familiar in their way of dosing and delivering it to patients. So, for example, we use oils only that are delivered with an oral syringe.
Then the question, of course, is that, so how many products are competing for that space, both in Denmark and in other markets that we serve? I mean, for Denmark, we're clearly one of the few. For some of the products, we are the only one. So in that way, we're in a good place. But of course, over time there will be more products that are very similar, a THC product, like it's just the strength that is different. And we expect over the next 2-3, perhaps 4 years, that what you call in the question, generic products, will be under higher price pressure. So we need to figure out what's the next type of product to keep a competitive advantage.
We think it's gonna take 2 to 3, 4 years before it's a real problem, so there's in a lot of places. Remember, we are a young industry. We haven't reached all the patients out there yet, so there's a lot of room for all the suppliers today. So there's no crisis in that. But in 3, 4 years, there will be a crisis if you didn't do any investment. And from Stenocare, we've been invested since 2020 in the next generation of medical cannabis products. So we have invested in a new oil technology that is a patent-protected technology that offers a lot of special features that any of the other oil products on the market today cannot match.
We know that we've tested it with docs, so we kind of have data that show that we can increase the uptake in the blood, which of course will give you a higher effect. We know we can uniform how it's absorbed in the body across all the different individuals, meaning that when the doctor is prescribing the medicine, he knows that every patient has the same uptake in the blood. Today, it's kind of, I don't know, we'll need to figure this one out as we go, type of approach, so that's also a really important value that we bring to market with this new technology.
We are branding it ASTRUM, so it's a new category of products, and we are planning and hoping to have the first product available for the market at the end, no later than the end of this calendar year. So two or three years ahead of where we need to be, which is great, so it gives us, again, a first mover advantage.
Maybe the next question here falls a bit in that category. I don't know if you have anything to add, but you can, if you have. How do you approach your product range, which currently consists solely of extracts? Do you have ambitions to explore other delivery formats?
I mean, again, we're talking to doctors in all our markets to understand what are they looking for? Are there any things they are missing in the treatment and the dosing form that they would like to see for medical cannabis? I think medical oils has been a really good choice for us. It's still a product, with, if you look at the oil category, it's still only 40% in most of the markets that we serve. 60% is typically flower. People are still enjoying having their joints, but we know and we see that oils are still growing. So oils still have a really interesting market opportunity going forward. But we're seeing in Australia, for example, that vaping, small vaping products are growing quite significantly these days.
We see that patches you put right on your skin in Canada is a way. We've seen nano sprays, where you spray through an inhaler or a kind of spray mechanism, also being something going forward. So we are reviewing all those types of formats, and it's always a balance. Is there a demand that justifies the investment, or are we trying to open a very locked door too soon? So we're always balancing, and of course, most importantly, we get input from doctors, and we basically do our pipeline management of new products based on that.
How do you view consolidation within the industry, and is it something you're considering?
I mean, consolidation has been happening in the medical cannabis industry since 2020. You saw the hype cycle that all the Canadians and U.S. companies, they just grew and grew, and they were buying, and they were investing and spending money like there was no tomorrow. But then we sort of had an end of that hype cycle, and a lot of companies left the industry. We saw a lot of Canadian and U.S. companies leaving Europe. And we also still see a lot of companies struggling to figure out how to drive a commercial strategy with their products. So we will certainly see more consolidation. We'll certainly see more exits or bankruptcy, a more negative version of that, in the years to come.
But I think to answer your question, it's really down to who, who actually have strong assets? Assets that are not just, "I, I build a greenhouse. I can, I can grow some plants." I mean, there's a lot of those guys out there, but what is the real asset that they are offering? And I think the companies that has the real assets, they are the ones that either get to acquire or get to be, acquired by, by other companies, in the future. Because they have something that adds value to the entire value chain. And I think Stenocare, we're a great example because we have always been working with four assets, that we keep investing in those four assets, and we document those four assets, so regulatory assets, commercial assets, supply chain assets, and partnership assets. So...
And you can see that on our home page, how we've grown the assets over the last few years. And then the last question, do you have any concrete plans on consolidation? No, we do not. So that's a very short and honest answer on that one.
Then can you explain the seasonality in your sales and also, at the same time, put some more information on your guidance? You have only reached less than 10% of your gross sales outlook target in Q1. When do you expect to see significant ramp-up in this number to reach your full year outlook?
I think-
Yes.
That's in line with what you already-
Yeah. As I, when I went through the sales, I think there I explained how we will go from Q8 to the full year of this year. But also, if you go back, you see and see quarter-over-quarter summarized for the last 12 months, you see that we have a growth already in our sales. But the main things are actually the new product in Denmark, which will, we think the combination of our 3 products will increase our sales significantly in Denmark, and Denmark is still our largest market. And then, for instance, in Germany, we started off in the fourth quarter of last year, so we haven't seen the effect of a full year.
And then Australia, we have a new partner, and we have a new product. So it's actually slowly climbing up towards to reaching our guidance for this year. And to the seasonality, we don't really see that in our business. We have, though, you could say that we sell to distributors, and they are very good at and very have very much focused on reducing costs. So what we do is to sell across quite a large quantity to those, and they put it on stock and sell it or send it each day to the pharmacies. So what we can have, we can have within a quarter, we can have large sales that tips from one quarter to another.
The patient use, we don't see any seasonality.
People do not feel more pain or have more cancer in summer versus winter... kind of approach. So, so that way, it's, it's very even, as you can imagine.
Yeah. What is the advantage of the new product that combines THC and CBD in one product?
I mean, I'm not a doctor, so I shouldn't be explaining how each individual product is being used for different treatment of patients. I think it's the real important thing to know is that we have these three different products that addresses different segments of patients. And as I think I mentioned this a bit earlier, that when we talk to doctors in all our markets, they are very focused on having sort of three-all three different types of medical cannabis, the high CBD, the high THC, and the mixture.
So, so that's really what it's all about, because if they get to be familiar with Stenocare and our brand and the type of products that we supply, then it's easy for them to have sort of a one-stop shopping. Even though that is kind of, again, the consumer mentality that we shouldn't apply to medicine, but still, I mean, doctors try to keep life simple for themselves, that they don't need to know a lot of different products and a lot of different suppliers. So if you only have one product, then they need two other suppliers to fill their needs. But when you have all three products that we have, then they just need to remember the Stenocare name, and they are ready to do some good work with their patients.
Then there's a question here that might be a business secret, but I will ask it anyway. Can you educate us in terms of the sales numbers in the different countries' percentages?
Yeah. I mean, we've sort of decided a long time ago that there are some of the details behind our sales, we don't provide it by country, though, and we don't want to provide it by product, because we, as I mentioned, we are a young industry, and there's a lot of people out there trying to figure out how their strategy should be aligned to be a winner in the future. And because we've been a first mover in many markets, we also had some learnings, and we don't think we should give that away for free.
Perfect. Then again, there's a long question here, so I will cut it up in different pieces. What is the status of your own facility? We have not heard anything since you began operations back in 2018-2019. Why have licenses not been obtained?
Yeah, I mean, we do, we did, and we have been communicating ongoingly on, so how is the facility progressing? It's right that we started. I can't remember exactly when we started cultivation, but that was probably in 2019 or 2020 or something like that. Probably in 2020.
2020.
Yeah, 2020. What we've been doing is actually refining the genetics of different strains of plants. This is a really huge investment of creating the right strains, because you take a seed and you grow it, and then once it's a seed, you never use seeds again, because then you start cloning, and you're cloning, and you clone to make sure you have the genetics in place. That's been one of the key areas of creating the right bank of genetics and testing it for strength and uniformity and all that.
Second thing that we have been spending a lot of resources on is, of course, qualifying the facility that we have, because we from day one decided that we wanted to create an indoor very high-tech facility that produces high-quality products that we would consider being pharmaceutical grade. And this is because we decided not to build like 100,000 square meters of a production facility because we basically just don't see there's a need for that. So we just created this facility you see on the picture, that is around 3,000 square meters in total floor area, where we can produce different strains in a very protected environment.
And then the question was, "So when do you get all the last licenses that is needed for you to start exporting?" And we have actually been ready for that for quite some time. But we've also learned from all the regulatory work, having products approved, again, all the three products you see on the screen, the latest one being approved here in Q1 this year, that the requirements are changing constantly. So the medicines agencies, not only in Denmark but in other markets that we serve are constantly putting higher and higher, and higher, and higher requirements on what it takes to get your products approved.
And all that learning, we sort of had to take that learning, roll it back into our facility to make sure that if we don't get it right from the production facility, then you'll never get it right at the point of a finished product. Because then you systematically produce it in the wrong way. So we have actually several times been kind of, "Let's go, now we'll do the final step." And then, with a new process of having a product approved, we realized, hey, the quality requirement has just moved up again. And it does. I mean, it's you can actually see it on our three products on the screen.
If you go and look at the patient information folder in those three products, they are probably approved with 8-12 months apart. Every time the authority has changed the details and the requirements for that patient information leaflet, and you said, "Well, it's a piece of paper, how difficult can it be?" Well, it's changing every single time, and that's just an example. But I could go on, and on, and on, on the requirements for documentation, the requirements for standardization, deviation on, on the different, production that, that you have, how you document. So all that boils down to that, that we have, constantly been going back and reinvesting and upgrading, the facility. And the, the ambition that we have is actually that this year, we'll have it, approved for, for export so we can start generating some profit.
So very long answer to a very short question, but if you haven't heard the story or feel you haven't heard the story, I might as well give you a sort of the longer insight on what is happening. So we are expecting that we can have products that we can ship and export out of the facility, hopefully end of this year, if everything goes to plan, with the medicine agencies. That is, of course, the black box that we all operate under, because they don't come just before we just because we invite them to come and do an audit. They are busy people as well.
The same person has a question in connection to that. Why do you believe you can compete with other countries where the coverage will not be comparable to an expensive product from Denmark in terms of cultivation?
I mean, it's actually... I mean, yeah, if you want to compete with flowers in Poland or Czechoslovakia, you're in trouble. But then don't go and compete in Czechoslovakia and Poland. So it's choosing the market where you can get a price and a profit margin for your products. This is what lies in our commercial assets that we will work in markets where people are prepared to pay for quality. Because, I mean, from day one, I've heard, "Oh, if I go to the internet or Christiania, I can get it for half the price." Yeah, but then let's not compare the products because there's no comparison.
So I think not trying to be overly optimistic or even arrogant, I'm just saying that you need to find your spot in the market. And again, we didn't build a 100,000 square meter facility to flood the markets of Europe with low prices. That's happening out of Colombia anyway. So don't compete with Colombia, that's gonna be difficult. Their salary, everything is lower. So you need to figure out where you need to position and we say from day one, we are a pharmaceutical company. We are targeting partners and customers that need pharmaceutical-grade cannabis. So that's kind of without sharing names and details how I would position it.
Yeah. And we are, we are nearing the end of the Q&A, but we have one question left here. Germany just legalized cannabis in April. The U.S. Drug Enforcement Administration has announced plans to declassify cannabis, and even Berlingske Tidende has a large story yesterday about legalization of cannabis. What is your analysis and expectation for impact on the Stenocare business?
Yeah, I mean, there's been a lot of excitement with all the declassification and legalization of cannabis in general. I think going a bit beyond the excitement, because in reality, in Germany, what I'm hearing from our partners down there, they say, "Well, it's not a product. You cannot buy cannabis legally in any store. You cannot sell it legally on the internet. It's still illegal, but you can grow three plants in your home." So, yeah, but is that our market? I don't think so, because again, we are in the pharmaceutical, we do prescription-based products. We are delivering to patients that really like to talk to a doctor that is educated on whatever severe illness they have.
But what we are seeing, and also the, the DEA from the U.S., and also now, the story you're mentioning in, in Berlingske, that it drives more general public acceptance of cannabis. Because it's a plant that has been stigmatized for so many years, and still it is being stigmatized. There's a lot of doctors out there that say, "Ooh, cannabis, that's really, really, really bad!" But when it becomes more available, like in Germany, like in other countries that are discussing it, we think that this is gonna drive acceptance also from doctors, also from patients that are kind of, "Ooh, I'm not quite sure cannabis is for me." So I think it's actually gonna positively drive the medical business.
In Germany, for example, one thing that they really haven't talked too much about in the media is that they also declassified cannabis in Germany. It's not like it's become legal, of course, for medical, but it's become easier for doctors to actually be allowed to prescribe. So now more doctors can prescribe medical cannabis, so the market just got bigger. There's more prescribers, and it's also become easier for different types of patients to be entering into cannabis treatment. So, I mean, some of the most optimistic people in Germany say, "Hey, it's gonna double the size of the market in Germany in the next year or two." So legalization can be good for the medical business as well.
So I think that's really the take we have, this is the expectation we have, and we welcome that general debate that we have. We have had it in Denmark for a long time, and I think our politicians are not ready really to legalize cannabis for general use. But it will actually perhaps push them towards, "Yeah, but medical cannabis is a good thing." And as you know, at the end of 2025, the politicians are due to have a discussion about how to make the cannabis for medical cannabis available permanently. So I think they are being slowly pushed in the right direction to make good decisions for patients and, of course, for the industry.
Perfect. That was actually all the questions, so that finalizes the Q&A. But before we end the webcast, I will just hand over the word for you, if you have any kind of final remarks to end with.
No, I think Peter and I, we hope that you had an introduction to medical cannabis. It's a really exciting industry to be part of. There has been some bumps in the last 5-8 years internationally, but I think the business and the industry is growing, it's maturing in the right way. Companies are becoming more focused on their top line, their bottom line. So I think it's a really exciting industry that lies ahead. A lot of opportunities ahead. And if you are interested in joining the Stenocare journey and towards becoming a leading brand in Europe, we hope that you will consider joining us as a shareholder at some point.
Peter was saying that here in June, we have a warrant exercise, new share emission that we're working on, and you can see here there's a link where you can go on our homepage and read more. It'll be an opportunity to invest in shares with Stenocare shares with a discount of 30% on the share price. So, I hope you give it a chance and have a look, and hopefully, we'll see you as shareholders. Thank you very much for your time.
Thank you.
Have a great day.