Gindi brothers acquired 55% of Israel’s most popular medical cannabis pharmacy

The Gindi brothers have signed an agreement for the acquisition of Max Pharm, a chain of popular cannabis pharmacies in Israel. With this deal, it is expected that the brothers will, in just one year, regain all the money they spent plus millions in revenues. Currently, as the sector keeps expanding in Israel, it’s reported that Gindi brothers are keeping an eye into more cannabis investment.

The Gindi brothers acquired control of Max Pharm Pharmacy in Holon, Israel – one of the most popular, if not the most popular, medical cannabis pharmacies. Their objective is to become a chain of cannabis stores with branches throughout the country.

For 55% control of Max Pharm Pharmacy, the Gindi brothers paid only $500.000 (NIS 2 million). “This is a very good deal for the Gindi brothers, as they have bought a successful and popular pharmacy at a relatively low price,” said an Israeli expert in the cannabis industry.

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An investment that could generate millions in the near future

It is estimated that Max Pharm will sell medical cannabis for around $6 million (NIS 22 million) in 2020. This is one of the pharmacies that present themselves with the branding of a medical cannabis store, i.e. a pharmacy that focuses mainly on the cannabis sector, along with continuing regular drug sales activities.

The acquisition was made by the Gindi brothers through BioPharm, which is a subsidiary of Cannomed – a publicly-traded company valued at approximately $21 million (NIS 75 million). In addition, BioPharm owns a new cannabis farm in a community that is also controlled by the brothers.

Under the agreement to acquire the rights to the pharmacy Max Pharm, it has been stipulated that the pharmacy owners, to date, Liran Maximov, will exercise the administrative powers over additional pharmacies that will be acquired in partnership across the country.

Maximov will receive 5% of the total management fee for future pharmacy sales that will be connected and managed by the network, but not for those not managed by it. Apparently, there is no obligation in the agreement to give the administration of the additional pharmacies.

Gindi brothers looking for more investment related to cannabis

Canomed recently announced that it has signed an agreement to provide Max Pharm with dried cannabis flowers for medical use and other products in accordance with the relevant regulations of Hikar – the medical cannabis unit of the Ministry of Health. The agreement is for the supply of 800 kg of dry flowers for delivery to patients in the pharmacy.

At the same time, the Gindi brothers continue to try to acquire 22.5% (with an option to increase to 45%) from another popular cannabis pharmacy, “Stem”, located on Hayarkon Street in Tel Aviv. This deal, the brothers reported to the stock exchange this morning, is yet to be finalized.

Gindi said in a report to the stock exchange this morning: “The company is conducting contacts to acquire rights in other pharmacies, as it sees an advantage in activity throughout the value chain from research and development, through growth to the final consumer, both because of the profits being brought to the final consumer and the ability to improve. And tailor the company’s products to patients.”

It has recently been revealed that pharmacies earn a very high share of approximately 31% of medical cannabis sales. Alongside the fact that spending is less than that of the other linkages in the manufacturing chain, pharmacies are by far the most profitable in the cannabis industry in Israel.

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(Featured image by Scott Graham via Unsplash)

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