Cannabis Europa – insights from leading cannabis investors
Last week saw European cannabis industry leaders flock to London to attend this year’s Cannabis Europa conference.
Among the politicians, patient representatives and CEO’s, were some of the most trusted voices in cannabis investment from across the globe.
Numerous sessions focused on the topic, the first of which was an interview with Curaleaf’s Boris Jordan on day one.
During the session, Mr Jordan suggested that consolidation in every market, even in the US and Canada, was all but inevitable and would be beneficial to even the biggest fish.
“In Canada there are way too many companies, I know it’s unpopular to say. In future it’ll be like the alcohol sector, a few big companies and then smaller craft companies. In my opinion, in the US, even the big MSO’s should merge, the costs are much higher than they would be if they combined, but there are regulatory anti-monopoly rules preventing this from happening.”
Turning to his company’s public listing in Canada, Mr Jordan explained that he ‘listed to help our investors and expand our investor base’, however, he conceded that ‘so far that hasn’t really worked’ due to the numerous barrier still in place for cannabis investors.
“We are owned by small retail, because even big retail can’t own international stocks. Most platforms don’t let you buy international stocks either. Even the retail traders that do invest have to be skilled to do so.
“The volatility is also a major barrier. I think we are on the path to change in the US. But it’s not an overnight thing, it’ll still take 6-12 months to get big money in. However, once that happens, you’ll see a major influx of capital flood in to the industry.”
In a later panel discussion on the potential impact US rescheduling would have on the European market, with the Founding Partner at Journeyone Ventures, Helene Servillon stated that when the 280e tax break ‘will likely fuel more M&A in Europe’.
This was echoed by Veridian Capitals CEO, Scott Grieper, who suggested that ‘there’s not that many states left for MSO’s to break into, so you’re going to see many more North American companies breaking into the European market’.
He continued: “We estimated that the drop in taxation on the top 10 companies will save them around $700m a year in taxes. There’s no more important metric of business success and business value than free cash flow, it also lowers the cost of capital as a borrower and as an equity issuer. Making capital cheaper should drive more investment activity.”
Mr Grieper concluded by suggesting that investors are much more likely to invest in markets where cannabis is federally legal, unlike the US where it remains federally illegal.
“You’re huge population in any EU, and you have federally legal jurisdictions that should attract the institution’s strategic investor, much more than it has in the US.”
Ananda Developments
Ananda Developments has seen its stock rise by more than 10% after it published ‘promising results’ from a pre-clinical study.
The Aquis Stock Exchange listed company announced last week updated investors with the first results from a recent preclinical study investigating the efficacy of its proprietary compound, MRX1, in treating cardiac fibrosis and heart failure with preserved ejection fraction (HFpEF).
The research, led by Dr Nadine Godsman and Dr Sarah Walsh at Robert Gordon University (RGU) under the guidance of Professor Cherry Wainwright, a member of Ananda’s Scientific Advisory Board, showcases significant cardioprotective effects in a mouse model.
The study revealed that MRX1 demonstrated substantial efficacy in reducing cardiac fibrosis and improving heart health, positioning it as a potential treatment for HFpEF.
This condition, which accounts for 50% of heart failure cases, is frequently linked to poor diet and lifestyle choices and is becoming increasingly prevalent, particularly among aging populations. The research involved thorough assessments of cardiac function, plasma CBD levels, and molecular markers related to heart failure, fibrosis, and inflammation.
Mice were fed a high-fat diet to induce HFpEF-like conditions, followed by MRX1 administration. Notably, the administration of MRX1 returned the heart and lung weights of mice to near-normal levels despite the high-fat diet, while the alternative MRX1 formulation did not perform as effectively.
The data from this groundbreaking study were presented at the 9th Federation of European Pharmacological Societies (EPHAR) conference in Athens. Additionally, these findings have been included in Ananda’s International Patent Application for MRX1, underscoring the novelty and potential impact of this therapy.
Charles Morgan, Executive Chairman, said: “We are delighted to share this profound pre-clinical data with the market which establishes that MRX1, our patent pending drug candidate, has a clinical impact. HFpEF is an area of high, unmet medical need and we are excited by the opportunity this presents to add another addressable condition to our portfolio, alongside our existing two Phase II trials investigating Chemotherapy Induced Peripheral Neuropathy and Endometriosis and other conditions that we are working up trials for.”
Cannovum Cannabis AG
The German listed cannabis operator, which is hedging its bets on the fledgling home cultivation and associations market, also saw a bump in its stock price this week.
It followed the launch of a new marketing campaign with one of the country’s largest retailers, Aldi-Sud.
Cannovum’s campaign will see ‘fake hemp’ plants sold in over 1000 stores across Germany, bearing the logo of its cultivation focused subsidiary, Anbau Allianz für Deutschland.
The fake plants are designed to raise awareness of the brand while promoting the acceptance and destigmatisation of cannabis in Germany.
It came ahead of the July 01, the date from which cannabis associations can officially apply for licences in Germany.
According to the company, it will soon announced the launch of the first reference clubs, where Cannovum and its partners will demonstrate how cannabis can be successfully grown and distributed in an ‘ecologically sustainable, legally compliant manner’.
“According to our calculations, a single club in Germany can generate up to 2.4 million euros per year with recreational cannabis. In the medium term, we expect several thousand clubs in Germany,” says Klaus Madzia, CEO of Cannovum Cannabis AG.
“We are proud to be able to provide a real measurable added value for the legalization of cannabis with Cannovum Cannabis AG, Aldi-Süd and Anbau Allianz. We are about to start the official cultivation by clubs and can already successfully demonstrate our expertise today.”
