December 5, 2018 / 11:03 AM / 2 years ago

UPDATE 1-Australian cannabis firm plans Frankfurt listing - sources

(Adds details, background on other cannabis companies)

FRANKFURT, Dec 5 (Reuters) - Australian cannabis grower Little Green Pharma is planning a Frankfurt stock market listing to raise money to expand in its largest European market for medicinal uses of the plant, people close to the matter said.

The company is working with Goldman Sachs and Deutsche Bank as so-called global coordinators of the initial public offering (IPO), which may take place in the second quarter of 2019, the people said.

Such a move would make Little Green Pharma the first cannabis producer to list in Germany.

The company and the banks declined to comment.

Scientists say evidence is growing that cannabis can ease epilepsy and other conditions such as chronic pain and multiple sclerosis, prompting renewed interest in a substance best known for its psychoactive properties.

The European market for medicinal cannabis, forecast to grow from around 100 million euros ($113 million) this year to at least 450 million in 2022, is benefiting from a relaxation in legislation in countries like Germany, Britain and Italy.

For now, recreational use of the substance, which has prompted interest from companies such as Coca-Cola and Molson Coors for cannabis-infused drinks in North America, remains prohibited in most of Europe.

Canada, by contrast, this year legalised recreational use of marijuana, and is seen as a testing ground for producers that expect to expand globally as other countries follow suit.

Earlier this week, Marlboro cigarette maker Altria said it was in discussions with Canadian cannabis producer Cronos Group about making a possible investment.

The stock market has seen a number of cannabis firms going public this year, mainly in North America.

In October, Danish cannabis firm StenoCare followed suit and nearly quadrupled in value on its stock market debut. It still trades at roughly twice its offer price.

A surge in local demand for cannabis in Canada may squeeze volumes available for export to Europe and growers such as Little Green Pharma may benefit from that, people familiar with the matter said.

Little Green Pharma, which says it is the market leader in Australia for medicinal cannabis products, does not publish sales or earnings figures.

$1 = 0.8821 euros Reporting by Arno Schuetze; Editing by Thomas Seythal and Mark Potter

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