Hellenic Dynamics Share Discussion Threads

[oakridge] 14/6/2023 14:35

It will be interesting to see if or when HELD receive a downpayment from this distributor, (and potentially others) if they effectively forward sell a couple of years worth of white label cultivation.

Rai said he has talked with 30 distributors this year, none of whom want to pay more for EU-GMP flowers when they've implemented this standard themselves in house (which in any case is mainly around post harvest activities, which could be costly to held).

If GACP is sufficient and the distributors need flowers, and HELD can sell them GACP flowers (or allow them to grow GACP flowers) then I can see the argument of lower initial and ongoing cost to HELD, a cleaner model, and most probably bigger revenues and sooner....as there *could* be much more rapid scaling to HELDS hitherto phased approach.

What we do know is the market is very large and growing - quickly - and the plants will need to be grown. If demand is outstripping supply, then that's very good news for us.

Distributors will be looking for three things: 1) specificity, 2) reliability and 3) scale - all at a competitive price. If HELD can offer that and can effectively pre-sell POD agreements, we could see something very good happen. Their location, utility costs, labour costs, site size and licence size on the face of it, all seem a good fit.

Not a lot more to say till we get another run of RNS'.....but it's certainly going to be interesting to watch play out. I've bought the dip quite heavily and time will tell if I was right or wrong.

AIMO etc & ADYOR.

[kevin467] 14/6/2023 14:32

Thanks Oakridge, your posts are always very informative and give a balanced view. I completely agree that we should be at the start of a news rich period which if all goes to plan as per their last RNS should see the share price a lot higher.

The whole POD side business could be a very shrewd move on their part. A new business concept in this space that as far as I can tell is unparalleled.

Like yourself Oakridge I endevour to buy into any further weakness :-)

Again thank you for all of your informative posts Oakridge, always a good read!

[oakridge] 14/6/2023 14:19

In case you missed it ⬇️

Hellenic Dynamics (LSE: HELD) announces MoU with Demecan Holding, let’s recap:

🤝 Hellenic Dynamics has signed an MoU with Demecan Holding for the cultivation and supply of medical cannabis flowers.

Thread continues ⬇️
Image
8:37 am · 14 Jun 2023
·
208
Views
2
Retweets
5
Likes

Hellenic Dynamics
@HellenicDynamic
·
6h
🇩🇪 Demecan is the only licensed independent German company covering the entire value chain for medical cannabis in Germany.
📃 This MoU represents the first commercial agreement for Hellenic Dynamics under the expanded contract cultivation strategy....

Hellenic Dynamics
@HellenicDynamic
·
6h
...allowing medical cannabis distributors to have their own dedicated white label cultivation facilities by way of a Hellenic Dynamics Product Outsourcing Development ("POD") agreement.

Hellenic Dynamics
@HellenicDynamic
·
6h
🏢 The agreement with Demecan is for an indoor cultivation area of 1,000 square meters capable of producing circa 1,200 kg of medical cannabis flowers per annum.

🌍 Hellenic Dynamics is in advanced discussions with other licensed European distributors for similar agreements.

Hellenic Dynamics
@HellenicDynamic
·
6h
💰The strategy aims to cut production costs, enhance business turnover, and generate earlier cash flows.

💼 The agreement strengthens Hellenic's client base and creates more value for shareholders.

Hellenic Dynamics
@HellenicDynamic
·
6h
✅ Hellenic Dynamics remains committed to excellence and compliance in its cultivation value chain.

[oakridge] 14/6/2023 14:14

Hellenic Dynamics signs first deal after strategy tweak to adapt to 'Cannabis 2.0' market shift

Hellenic Dynamics Plc -
Medical cannabis producer Hellenic Dynamics Plc (LSE:HELD) shares bounced back slightly on the announcement of the first deal since flagging its "adapted" business strategy a week earlier.

The specialist cultivator of medical cannabis flowers, which owns a near-200,000 sq m facility in Greece, has signed an agreement to cultivate and supply to Demecan Holding, a German medical cannabis producer and distributor.

Demecan, like many producers, has moved from cultivation into distribution and works to secure product from other medical cannabis cultivators to ensure reliable and continuous supplies for patients in its home country.

Part of Hellenic's strategic tweak last week was to expand its contract cultivation strategy so medical cannabis distributors, such as Demecan, will be able to reserve a dedicated area of the Hellenic facility for a 'white label' cultivation facility, under what it is calling a product outsourcing development or 'POD' agreement.

The London-listed company plans to add more such contracts while continuing to also focus on cultivating its own crop of medical cannabis plants.

Instead of investing more funds and time into the construction and certification of its facility under the EU-GMP (good manufacturing practice) rules, Hellenic said it will instead focus its cultivation and supply of GACP (good agricultural and collecting practices) flowers to distributors that have the EU-GMP certification themselves.

As such, last week's announcement, said chief executive Davinder Rai, was less a change of strategy that an adaptation to the evolution of the medical cannabis industry over the past year and a half into what he calls Cannabis 2.0.

"The industry has moved from a cultivators market to very much a distributors market - and distributors are far closer to the end patient and know what the patients want, having built up over the past five years a great understanding of patient demand.

"We've reacted to that market. I've spoken to 30 distributors last six months, not one single one of those wants to buy EU GMP flowers, where the wholesale price is marginally higher than the GACP price. So building a GMP facility didn't really make sense for us."

Instead, he said Hellenic's focus "will simplify our lives so much - we can control that vertical by saying we are a cannabis cultivator that cultivates cannabis, we sell cannabis and we don't need to get involved with the other parts of the business because our customers already doing that."

By allowing distributors Demecan and others to "move one step up the vertical" by allocating them some cultivation space with the aim of allowing Hellenic to pre-sell its products two years in advance, the board thinks this will create more value for our shareholders.

[oakridge] 14/6/2023 14:06

Correct. Cultivation is in essence the growing / production of. Harvesting is harvesting.

kevin467, you make fair points in your post 923, however I try to see the opportunity in any given situation.

The latest update suggests a good level of news-flow to come over the coming weeks and just maybe some of this news-flow will clear a number of questions in investors minds (?). That's not a given, but I think there is a good chance of it happening.

Issues around the Ops license, the scope of the fit-out achieved, the signing of other POD agreements and an up to date comparison of our achieved initial cultivation rate vs the previously intended Phase 1 rate for 2023, might all help bring some perspective, irrespective of whether we are a couple of months behind schedule or not.

If more POD agreements follow and HELD can show that these agreements are being actioned and the scale of cultivation is level with or perhaps ahead of that intended (and without the capex and forward costs) then the shares should see a decent recovery imo.

It can certainly go against rational thinking, but my best returns have always been made from buying weakness and doubt and selling enthusiasm and certainty. But I accept it can be very hard to master and doesn't always work out.

The shares are currently a long way off the very recent >0.20p highs, where people were scrambling to buy decent volumes.

So I question whether the shares are oversold and whether they are much better value now, post the change in tack, or whether the change in business model really is that problematic.

Given that the first RNS was so unexpected combined with being so poorly composed and seemingly 'incomplete' and thin on information, I think this may have served to exaggerate the situation.....a situation which has already seen some improvement in yesterday's RNS, which read like a main market RNS and suggested that further news is to follow.

HELD are again buoyant on the tweets today and seemingly confident on what is to come.

We'll see what's announced and I don't think we will have to wait too long for it.

AIMO ADYOR NAI etc etc.

[kevin467] 14/6/2023 13:07

Cultivation being the growing of plants, Harvest being the cropping of plants. No abiguity on the wording used. If they refer to Harvest they mean the crop has been produced and time to cut the blighters down :-)

[ashleyjv] 14/6/2023 12:49

Cultivate means to prepare (The ground etc) to grow crops and obviously Harvest is to pick them.

Are we just assuming they mean Harvest when they use the word Cultivate or are they talking about the next crop.

[pirates4] 14/6/2023 12:34

It might take off once or if we hear any news relates towards an NHS award.

[kevin467] 14/6/2023 11:58

Personally I would like to know what has changed from the earlier RNS (Jan23) that had a couple of key Highlights

· Phase one cultivation fit out strategy well underway

· On track for first harvest in mid-2023

Given that the facility has the ready built infrastructure already in place I cant see how it is taking so long to "fit out" from Januarys update. This is not that difficult and should not take this amount of time. With that said they could well have everything in place and ready to go which begs the question how they are not well underway.

Leads me on to "On track for first harvest in mid-2023". This for me was really disappointing and that statement alone was completely wrong. Harvest means Harvest and when we were all waiting for the update on the harvest we get told we can expect harvest September time I think it was, so completely missed that target.

I would like to see more shareholder engagement and transparancy from the company as at the first hurdle they have lost my confidence and trust.

Knowing what i do about the cultivation of this wonderful plant there is actually very little to go wrong throughout the whole process especially as they have experts to ensure climate / lighting / nutrients etc are monitored. Main risks to cultivation being things like Bud Rot / Spider Mite / Aphids etc again would be covered by the experts prior to and throughout the grow as prevention is better than the cure for sure. The facilities they have are absolutely ideal to cover all of this.

I think an RNS stating they have ALL the necessary licences would certainly be welcomed as this is still unknown.

If they have been cultivating a base of plants for cloning we can expect once "cloned" 2 weeks to take root, 4-6 weeks vegatative state, 6-8 weeks flowering, flushing and 2 weeks drying / curing. Rinse & Repeat.

Hopefully we can get more of an update soon on licences and where we are in the cultivation cycle. Be good to know how many plants are on the ground once underway!
Best of luck to all.

[pirates4] 13/6/2023 12:45

Otherwise they wouldn't be cultivating and harvesting in Greece, they have to be compliant to regulations.

[oakridge] 13/6/2023 10:24

Also, a thought that occurred to me was that certain parts of the facility may actually be EU-GMP compliant (for example, let's say bunker 1), enabling them to grow and market a limited amount of their own product on reoccurring cycles (as originally planned)......but they have opted to 'POD' other parts of the site to distributors who themselves have the EU-GMP and therefore, not waste time and money in implementing EU-GMP themselves on those other parts of the facility.

That theory would make sense and would certainly accelerate the pathway to revenues and scale, as stated in today's RNS.

I might be wrong, but on the info available and reading between the lines, that is my best guess as to where we are at. It might also explain why HELD are apparently (?) still eagerly looking to buy up growing and activation equipment. Wearing a cynics hat, it might be easy to judge that this is still for the initial, limited fit out.........but it might actually be a result of going for volume, quicker, via POD agreements and where further commissioning of the site is required asap (ie quicker phasing).

If they do get EU-GMP for their own limited grow and processing area (not a stretch too far, I'm sure) this could be the precursor to the Ops license.........with only GACP for the rest of the site and where those incoming distributors who DO have EU-GMP is sufficient to grow in scale.

IF that is the case and I'm broadly on the money, it would seem scale and larger revenues would indeed likely come sooner to HELD and, crucially, at a lower CAPEX, and with no associated onward cost of sales.

Again, all speculation on my part, I might be correct, partially correct or entirely incorrect, so ADYOR etc and NAI.

[oakridge] 13/6/2023 10:14

Edited below.

[gozo] 13/6/2023 10:07

I agree....license won't be problematic. Good for all involved.More news to follow imminently GLA

[oakridge] 13/6/2023 10:01

triskelion - it's a fair point.

I'm certain HELD are well aware of the Operations License and it might well be the next thing we get to hear more about.

Would be a tonic if they RNS'd confirmation of this, or brought some clarity as to where they stand on this point, given the evolving regulatory framework.

My honest guess is that it is still a necessity and will be granted shortly.

Greek authorities WANT this industry to thrive and I'm sure HELD will be doing all the right things to ensure that it is granted.

We'll see.

AIMO ADYOR.

[oakridge] 13/6/2023 09:53

A pretty fair assessment Nappers.

I think we will see serious uplift, on the confirmation that we have the first set of clones ON SITE. You either think that will happen, or not. I do....and going off the other RNS we can expect to be actively cultivating late summer (ie September)....really not that far off. And who knows, it might come in slightly earlier than that.

But there should be a run of decent updates before then, some of which will hopefully offer further reassurance to the mkt.

However, I think those who wait for first sight of 'greenery' will have missed the bottom in respect of an entry and/or adding. HELD themselves, in a tweet this morning, have stated that there is "more to follow". I interpret that to be around the signing up of more POD agreements for other distributors. Granting of an Operations License (if indeed it is still needed, under the new plan), confirmation of certain works at the site and the activation of certain bunkers should each and all be deemed RNS'able.

Interestingly, in today's RNS they have also confirmed that they will continue to grow their own plants in line with the original plan. So it would seem to be a mix of revenues going forwards and it will be interesting to see which other firms HELD signs up.

AIMO ADYOR etc

[triskelion] 13/6/2023 09:53

"It is anticipated that the binding agreement with Demecan will be in place in line with Hellenic Dynamics' cultivation strategy, as per the Company's previous announcement."
It would be good to know what the principal conditionality in the non-binding MoU is - like for instance: the Operations Licence....?

[nappers] 13/6/2023 09:13

This will only rerate once we get confirmation of cash flow or firm news of harvest and quantity. The expectations of this was what saw us north of 20 as investors anticipated the RNS confirm. We now to build up towards the harvest news so hopefully we can be north of 20 as we go into late summer.

[oakridge] 13/6/2023 08:35

Hellenic Dynamics
@HellenicDynamic
·
8m
Hellenic Dynamics is also in discussions with a number of other licensed European distributors, who have their own GMP processing facilities for similar POD agreements.

More to follow.

[oakridge] 13/6/2023 08:22

"Hellenic Dynamics, in adapting with the market changes, has seen fit to expand its strategy to include the production of customised GACP products cutting down its production cost and the time to deliver products, which should enhance the business turnover and generate earlier cash flows. This strategy also allows the Company to diversify and accelerate cash flows whilst strengthening its relationships with a number of key distributors across Europe and establish production at scale."

[oakridge] 13/6/2023 06:59

I think we can say that there is a huge gulf in quality and content of this latest RNS vs the last one....since which I actually ended up doubling my holding amid the weakness.

A very good announcement with much to discuss.

I anticipate that those outstanding areas of uncertainty (including, for example, garth's question mark over the Operations License, above) will be duly answered over the coming weeks and months as the company advances towards cultivation. Can't believe the company wouldn't have addressed this and other points. So watch this space.

In time, HELD might just be vindicated in that the POD model they've pivoted to is indeed very well judged and provides a good fit for the direction the space will take. The license is vast, as is their site....so they would be pretty unrestricted should other companies want to follow suit. They state they are already in talks with signing other distributors to the same.

One swallow, of course, will not make a summer.....but I am anticipating a decent run of announcements as the company moves towards first cultivation, for there should be plenty of newsworthy checkpoints to arrive as they get there.

AIMO and ADYOR etc

[oakridge] 13/6/2023 06:45

Hellenic Dynamics PLC Signing of MoU with Demecan Holding
13/06/2023 7:00am
UK Regulatory (RNS & others)

Hellenic Dynamics (LSE:HELD)
Intraday Stock Chart

Tuesday 13 June 2023
Click Here for more Hellenic Dynamics Charts.
TIDMHELD
RNS Number : 4750C

Hellenic Dynamics PLC

13 June 2023

Hellenic Dynamics plc
("Hellenic Dynamics" or the "Company")
Signing of MoU with Demecan Holding ("Demecan")

- Demecan is the only vertically integrated independent German company licensed to grow, process and distribute medical cannabis in Germany

- MoU is the first commercial agreement under Hellenic's expanded strategy into contract cultivation

- Advanced discussions underway with a number of other licenced European distributors for POD agreements

Hellenic Dynamics plc (LSE: HELD), the specialist cultivator and supplier of tetrahydrocannabinol (" THC") dominant strains of medical cannabis flowers, announces it has signed a Memorandum of Understanding ("MoU") with Deutsche Medizinalcannabis GmbH which trades as Demecan Holding for the cultivation and supply of medical cannabis flowers.

Demecan is the only licensed independent German company that covers the entire value chain for medical cannabis from cultivation through processing to distribution. Demecan works with producers of medical cannabis worldwide to ensure a reliable and continuous supply of medical cannabis for patients in Germany.

This MoU represents the first commercial agreement for Hellenic Dynamics under the expanded contract cultivation strategy it announced last week whereby it will allow, for the first time, medical cannabis distributors to have their own dedicated white label cultivation facilities by way of a Hellenic Dynamics Product Outsourcing Development ("POD") agreement.

Under the MoU, Hellenic Dynamics will grow and supply medical cannabis flowers from Demecan provided cultivars in an indoor cultivation area of 1,000 square meters capable of producing circa 1,200 kg of medical cannabis flowers per annum under Good Agricultural and Collection Practice ("GACP"). Demecan will then process the delivered flowers in its own EU-GMP facilities for onward sale to the German market. It is anticipated that the binding agreement with Demecan will be in place in line with Hellenic Dynamics' cultivation strategy, as per the Company's previous announcement.

Hellenic Dynamics is also in discussions with a number of other licensed European distributors, who have their own GMP processing facilities for similar POD agreements. The model allows distributors to fully define the specific type of medical cannabis they want to receive using either Hellenic Dynamics' strains or the distributor's own strains. Hellenic Dynamics will then cultivate and despatch directly to the distributor, branded under the distributor's chosen brand name. It is currently anticipated that customers will be contractually obliged to take a POD area for a minimum of two years.

This outsourced model means that Hellenic Dynamics handles the entire fit out of the POD and all cultivation requirements, with oversight from the distributor if they so wish. Hellenic Dynamics' distributor customers can also benefit from certain of the Company's relationships, for example the recent MoU agreement it has with ELGO-DIMITRA, the Institute of Plant Breeding and Genetic Resources located near Thessaloniki in Greece, which may enable POD owners to have their products registered and IP protected in Europe.

Under this strategy of white label cultivation, Hellenic Dynamics intends to have a select number of distributors utilising a POD agreement, while the Company will continue as planned to produce its own crop of medical cannabis plants. The medical cannabis markets in Europe are rapidly evolving and in the last 18 months cultivators have been struggling with soaring energy costs. In addition, many distributors have been building their own EU-GMP facilities. As mentioned in the last Company announcement, Hellenic Dynamics, in adapting with the market changes, has seen fit to expand its strategy to include the production of customised GACP products cutting down its production cost and the time to deliver products, which should enhance the business turnover and generate earlier cash flows. This strategy also allows the Company to diversify and accelerate cash flows whilst strengthening its relationships with a number of key distributors across Europe and establish production at scale.
Hellenic Dynamics remains committed to excellence and compliance across its cultivation value chain.

Further details on the POD expanded cultivation strategy can be found at: hxxps://www.hellenicdynamics.com/investor/#s4

Davinder Rai, CEO of Hellenic Dynamics, commented: "This POD agreement represents another development in the future of the Company's medical cannabis cultivation and underpins the long-term value inherent in the business and our operating model. We can allow distributors to grow the products they want in their own dedicated white label cultivation areas, which we then ship to their EU-GMP facilities for processing enabling us to widen our client base and creating more value for our shareholders."

[solarno lopez] 13/6/2023 06:44

EVERTON......it most definitely IS !

[everton448] 13/6/2023 06:14

Well this looks like good news!

[garth] 12/6/2023 07:25

It is my view that if they had an operational licence we would know about it. But I guess that view is born out of long and bitter experience with AEG.

We'll see...

Best wishes,

G.

[extrader] 11/6/2023 22:27

Thanks for your quick comeback. I agree ;->

Still no clarity re whether HELD has an operational licence or not.

Maybe we should save further discussion until someone has heard back from Dev on that score ?

ATB