Just two cannabis companies are currently publicly quoted on the U.K. markets compared to more than 60 in Canada.
But, this looks set to change over the coming months and years as cannabis business gears up to the changing regulatory environment in the U.K. and Europe. Australia-born and London-based, Melissa Sturgess, spent over 20 years working with listed natural resource companies before succumbing to the ‘Green Rush’.
She says: “I saw what an incredible thing was happening, how medical cannabis was benefitting so many people and how business was gearing up to support the industry’s growth.”
Ms. Sturgess is Chief Executive of Ananda Developments which listed on the junior NEX Exchange in July 2018, raising £930,000 to invest in medical cannabis focused companies. Its listing followed the first public listing by Sativa Investments in March, that year; it is now valued at over £20m.
Ananda’s first investment quickly followed; US $200,000 into iCan Israel-Cannabis Ltd, a globally-recognized Israeli company focused on the medical cannabis industry and organizer of CannaTech, the renowned global cannabis event.
This was followed with a further investment into Liberty Herbal Technologies Limited the owner and developer of hapac, a technology for vaping medicinal cannabis. There are others coming down the track. Ms Sturgess says: “We are constantly assessing opportunities and I can see three deals a day from parties looking for capital.”
Cannabis; It’s a Dog’s Life
Speaking on the prospects of the U.K and European market over the coming years she equates the current market climate to the fast-moving timeline of a popular family pet.
“Legislation in the U.K. is now moving much faster than we thought, with the introduction of the new medical cannabis legislation last year. While deal activity is slow and steady it is ramping up and and will increase. Business opportunities are increasing as more people get their heads around medical cannabis.”
“We will see exponential growth and we are looking at a massive deal flow. I equate a year in the cannabis industry to a year in the life of a dog. For us, it’s one year for our dogs it’s seven and that’s what it feels like in cannabis right now,” she says.
The fourth edition of European Cannabis Report released by London-based Prohibition Partners, earlier this year, estimates that Europe’s legal cannabis industry will be worth up to €123bn within 10 years.
Cannabis Invest U.K.
Canadian-born Patrick Morton quit his investment banking analyst’s job to co-found Cannabis Invest U.K. It provides opportunities for industry professionals, businesses and potential investors to meet and discuss investment opportunities and new products.
He says: “While there are currently only two listed U.K. businesses there are several in the the process of going public. This tends to take longer than many would hope for, although I expect to see some listing on AIM (a junior market) and the LSE main board by the end of the year.”
He says the big theme for the U.K. over the coming year will be for more people to secure access to medical cannabis – less than two dozen prescriptions have been given to patients since the law change on November 1, last year. Some in the health community believe up to three million patients could benefit from medical cannabis in the U.K.
He continues: “It will be just a matter of time, as U.K. law liberalizes. It will be normal, and then we will see more medical cannabis companies wanting to provide cannabis to the patient network. As the discussion enters the public sphere more and more people will realize that cannabis provides nothing but positive benefits for society as a whole.”
“It boosts Government tax revenues, money isn’t wasted on prohibition, it creates jobs and is beneficial to public health. Then, as we move on from medical cannabis, the conversation will turn to recreational cannabis. This is going to provide some massive, massive opportunities for business.”
CBD – ‘Not much differentiation’
Mr. Morton says the market is opening up to all types of investors from private individuals, pension funds, and private wealth mangers to acquisitive cannabis and non-cannabis related businesses.
The U.K. market is already being supported with investment from the main Canadian players. One of the first movers into the UK market has been Canopy Growth; Its new UK subsidiary, Spectrum Biomedical, began importing and distributing cannabis to pharmacies earlier this year.
Ms. Sturgess says she expects to see the market develop in an ‘iterative’ way: “We may well see the emergence of some vertically-integrated cannabis vehicles in the UK and Europe, but as the sector matures, over time, these business may segment driven by increased market specialization.”
She also expects to see lots of activity in the CBD space. “It’s something we are looking at. It’s buoyant, and will continue to grow, and as it does I think we are going to see an increased focus on science, branding, quality and purity. At the moment there seems too much to chose from, and not much differentiation.”
Cannabis companies with U.K. aspirations and focus
The main U.K. company by many billions of pounds is the global giant GW Pharmaceuticals which is listed on the NASDAQ in New York. U.K. businesses currently exploring listed status are the multi-multi-faceted, London-based European Cannabis Holdings, which has hired Canaccord Genuity to drum up investors, reports The Times. A valuation of more than £100m has been touted.
Earlier this year The Sunday Times reported that Emmac Life Sciences, a producer and supplier of medical cannabis, was also gearing up for a London float. U.K. newspaper The Mail on Sunday reported that Kanabo Research has chosen to list in Britain instead of Israel, where it was founded.
In April, U.K. business Highlands Natural Resources, which is listed on the main market, raised £1.3m to launch a cannabis operation in Colorado. Also on the NEX Exchange, Imperial X, a mineral company, announced earlier this year it was shifting focus to medical cannabis.