SUGGESTIONS that CBD is a fad – a boom-to-bust market – with the latter imminent, raised a few eyebrows at Cannabis Europa.
In an occasionally feisty discussion panel host Prohibition Partners’ CEO and co-founder Stephen Murphy, challenged CBD entrepreneur Clifton Flack, founder of UK firm CiiTECH.
“Is CBD all about the hype? It is accessible, it’s easily available, it’s easy to set up a business, to secure a white-label product and launch a website
“There are low barriers to entry, there are questions around brands, around the supply chain and efficacy. Is CBD here to stay, or has it peaked?”
No-One Buys CBD For Fun
“Its booming,” retorted Mr Flack. “There are low barriers to entry in CBD but the same can be said about medical cannabis – a company can promise to be the best cultivator, secure millions of investment and not deliver on revenues for years.
“What both lack is a business; a brand that sells, that can demonstrate a track record of sales and revenues.”
Mr Flack’s company CiiTECH launched its Provacan range five years ago and as such has the data, sales and track record which convinced investors to support its pre-IPO, LSE fundraise earlier this year.
He recently rebranded the company as a ‘Cannabis Healthcare’ brand saying: “No one buys CBD for fun – only for health benefits.”
Mr Flack believes that as the cannabis market matures the key to success will be the emergence of brands and the ‘convergence ‘of the CBD and THC brands and markets, saying CiiTECH aims to be to the fore in this regard.
“The THC market is all about cultivation, and extraction. The brand is neglected under the mistaken belief that cultivation equals sales.
“As we move to launch our THC brands in Israel we will be working with the best of the best, and aiming to build a leading brand.”
Institutions Still Wary
Kingsley Wilson, Co-Founder of Chrystal Capital Partners, an investor in CiiTECH, said there is still no appetite in the institutional capital market for cannabis due to the issues with compliance.
He said the key to backing CBD brands included finding the right management team, and he highlighted that a common fatuous approach from many players in the industry is to say ‘we are about to IPO, and will be acquired next year’.
He believes the CBD industry may be at the ‘end of the beginning’ and we may be in for a process of consolidation in the market which could provide opportunities for private equity.
Stanton McLean, the Advisory Director of Artemis Growth Partners, came to cannabis through personal CBD use and highlighted the need to support greater consumer education in the market. He also believes the institutional investors continue to be wary of the space due to compliance concerns.
Cannabis Europa, organised by Prohibition Partners, took place at Central London’s Banking Hall yesterday and Wednesday with a host of leading speakers and attendees.
