Little Green Pharma: Growing, Diversifying, and Still Under-appreciated

If Little Green Pharma (ASX: LGP) were a retailer or industrial business, its latest quarterly and full-year figures would likely be met with enthusiastic nods from analysts and brokers. Yet, as a medicinal cannabis company, it continues to be pigeonholed—judged more on sector stigma than financial substance.

The June quarter saw LGP bank a record $12 million in cash receipts, up nearly 50% on the same quarter last year, and pull off a $0.5 million operating cashflow surplus—a welcome reversal from a $0.75 million deficit in the previous quarter. Quarterly revenue of $9.1 million (unaudited) was slightly down on the prior quarter but still a tidy 20% above the same time last year.

For the full FY25, the company chalked up $36.8 million in revenue, reflecting a compound annual growth rate of 52% since FY22. Adjusted EBITDA came in at $2.9 million and net profit after tax at $3.3 million—a rarity among ASX-listed cannabis names, where red ink is more common than green shoots.

A few more stats that would make a traditional industrial investor blink twice: LGP’s net tangible assets sit at $0.24 per share, while its enterprise value is only 0.4x NTA and 0.8x revenue. The company holds $2.5 million in cash, with over $5 million in unused finance facilities and a modest $3 million in long-term debt.

Now let’s imagine these figures belonged to, say, a mid-tier packaging company or a niche online retailer. Solid revenue growth, a positive EBITDA margin, free cashflow, and under-leveraged? Analysts would be all over it. Brokers might slap on a multiple closer to 2–3x revenue and call it undervalued. But in cannabis? Investors still carry the scent of risk like it’s a 2018 IPO deck.

Sector comparisons are illuminating. Most ASX-listed cannabis companies are either pre-revenue, loss-making, or burning cash with ambitious overseas dreams and little operational discipline. By contrast, LGP is selling product into over a dozen export markets, is one of the top three suppliers in Australia, and has clinched first-mover advantage into the fast-expanding German and UK medicinal markets.

In Germany, flower sales from its Danish facility surged 70% in the June quarter. The company launched its first brand (CherryCo) there, chasing a price-conscious segment with volume potential. “We are seeing continued rapid growth into Germany,” said managing director Paul Long, adding that “a record 37.2 tonnes of cannabis was imported into Germany in CY25Q1, up 15% on the prior quarter.”

Little Green Pharma CEO and Managing Director Paul Long

Meanwhile, the UK medicinal market—quietly booming, with over 60,000 active patients—is generating over $2 million in purchase orders for the current half. LGP is one of the few Australian players meaningfully positioned to benefit.

Domestic growth is a harder grind. Budget flower sales in Australia declined 35%, as competition intensified, though this was offset somewhat by 10% growth in local oil sales and a 5% bump in vaporisers. Regulatory friction didn’t help either, with a $0.5 million Australian flower shipment to Germany delayed and UK/French deliveries stymied by timing mismatches.

Still, the business model shows resilience. “Our Danish facility is the largest medicinal cannabis facility in Europe and is well positioned to capture growth across Germany, the UK, and the wider European market,” Long noted. That strategic positioning could prove a game-changer as European demand scales up.

The company’s asset-heavy model—especially the vertically integrated Danish operation—is another factor where perception differs. In any other sector, the commissioning of a new 2.4 tonne-per-annum (tpa) room boosting total capacity to 8.5 tpa (with another on the way) would be viewed as infrastructure investment. Here, it’s met with wariness about oversupply.

Even the regulatory backdrop is shifting. Germany’s partial legalisation and Denmark’s new law allowing LGP’s site to become an EU cannabis import hub from 2026 are genuine tailwinds. So too are emerging reforms in Victoria on workplace drug testing, and AHPRA’s updated guidelines on telehealth prescribing—both signs of a maturing domestic market.

So what gives?

For starters, the market still sees cannabis through a binary lens—either a speculative pot stock or a commodity producer. But LGP is carving out something more nuanced: a globally diversified, cashflow-positive, brand-building operation that wouldn’t look out of place in healthcare or agtech.

Until the stigma fades, companies like LGP will likely remain mispriced. But to the discerning eye, the business beneath the leaf is far more industrial than indulgent.

This article does not constitute financial advice. Before making any financial decisions, readers should consult their own financial adviser/s and conduct their own research.