Little Green Pharma (ASX: LGP) is proposing to sell its WA production facility to **Lauana Pty Ltd ATF Lauana Trust **for $7.8 million and lease it back, with funds to support Australian and European expansion.
This facility is a ~1.3 tpa GACP indoor cultivation and GMP-compliant production site located in South-West Western Australia.
The company will operate the site under a head lease, which extends through to 29 August 2029.
The proceeds from this sale are specifically intended to fund Australian market opportunities and support European expansion.
Funding Growth and Expansion
The sale provides Little Green Pharma with a $7.8 million cash injection, specifically earmarked to support its strategic initiatives.
These funds will develop new opportunities within the Australian medicinal cannabis market.
Furthermore, the capital is intended to fuel expansion efforts into growth markets across Europe.
This aligns with previous reports of strong growth in Europe, with sales reaching $3.8 million in Q4 2025, which included a $0.6 million oil shipment to France.
Operational Continuity Maintained
Under the terms of the agreement, the WA facility will continue to operate under a head lease for approximately 3.5 years.
This arrangement, extending through to 29 August 2029, includes provisions for make-good, maintenance and replacement of capital items.
An option for a further five-year lease with LGP’s cultivation contractor is available after the initial head lease term.
This structure ensures operational continuity and stable production at the site.
Merger and Regulatory Landscape
This strategic asset sale aligns with Little Green Pharma's broader corporate direction, including its proposed merger with Cannatrek.
The merger aims to create a larger, vertically integrated medicinal cannabis group with pro forma FY2025 revenue of $112.3 million.
The company has also noted recent US regulatory moves, such as the Executive Order to reschedule cannabis from Schedule I to Schedule III, as a long-term positive for the global medicinal cannabis industry.
Previous quarterly activities reports from January 2026 highlighted growth in European sales and an ongoing focus on international expansion, which this funding initiative directly supports.
Outlook and Risks
The sale of the WA facility offers Little Green Pharma a significant cash injection to fuel its strategic growth plans, particularly in Australia and Europe, while maintaining operational continuity.
However, the transaction is contingent on several conditions precedent, including buyer due diligence and financing, introducing execution risk.
Investors will monitor the successful completion of this sale and its integration with the broader merger strategy with Cannatrek.
