Indiva announced on Wednesday that it has signed a letter of intent with AEssence Europe, a subsidiary of a California-based hydroponics provider, to acquire a medical cannabis cultivation licence in Denmark.

The deal — funded with $1.1-million cash and 1.6 million Indiva shares — is part of the London company’s plan to create Indiva Europe, a wholly-owned subsidiary that will oversee its operations on the continent where a growing number of countries are legalizing medicinal marijuana.

Indiva chief executive Niel Marotta described the deal, which is expected to be finalized by the end of the year, as “the gateway to Europe” “This is a big deal for us,” Marotta said Wednesday. “It allows us to build a global platform, and the European market is huge: half a billion people, high per-capita GDP across the board.”

Other European countries to legalize medical cannabis include Germany, Greece, Italy, the Netherlands, Poland, Portugal, the United Kingdom, Norway, Romania, Croatia, Switzerland, Luxemburg, Cyprus, Macedonia, Finland and Malta.

Although no EU country has legalized recreational cannabis — only Canada and Uruguay have done so — approving the drug’s medicinal use is seen as the first step toward complete legalization.

A recent BMO report estimates the European Union’s prescription pot market will top $30 billion within seven years, provided all EU members legalize the drug. That number would jump by $68 billion if recreational cannabis is legalized, the authors said.

In Denmark, Indiva Europe will partner with AEssence Europe to build a research lab and indoor growing operation, where it will produce medical marijuana that meets European Union standards, the companies say.

“That will enable us to sell product not only in Denmark, but all over the EU,” Marotta said of the operation.

He noted the goal isn’t to build the biggest greenhouse. “We don’t talk about acres when we talk about our business. We talk about products that delight our customers and our patients,” he said.

In addition to producing marijuana and cannabis oils for the medicinal and recreational markets in Canada, Indiva is developing a line of cannabis-infused edibles, salts and sugar products.

A publicly traded company, Indiva is expanding its 10,000-square-foot facility on Hargrieve Road to 40,000 square feet and growing its workforce to 50.