MEDICAL cannabis device maker Kanabo Group will today become the second cannabis company to list on the London Stock Exchange.
CEO Avihu Tamir believes it will be followed by many more and within couple of years there may be a many as 50 cannabis companies trading on the exchange.
Kanabo’s (LSE:KNB) shares debuted at an opening price of 6.5p and if they follow the trajectory of last week’s debutant MGC Pharmaceuticals expect to see some significant uplift this week.
Kanabo’s VapePod is the first medical cannabis vaping device to secure regulatory approval and, following Israel’s lead, Mr Tamir says copyright approval for the European market is imminent.
€500m Addressable Market
VapePod’s market-leading position follows years of research and endeavour (see panel below) and will be launched into an addressable market with a cumulative value of €500m by 2024.
Mr Tamir told BusinessCann it had initially sought approval for an LSE listing two years ago. And, following lengthy discussions with the UK Financial Conduct Authority, it finally agreed to list medical cannabis and CBD companies in September last year
“We had considered other markets but chose the LSE for its deep access to capital and while it has taken longer than expected, or wished, we were sure we would be approved and that we would see cannabis companies on on the LSE,” said Mr Tamir.
Kanabo’s listing has been accomplished via a reverse takeover with the SPAC Spinnaker Opportunities and will trade under the Kanabo Group name with a value of around £23m.
Kanabo – Esperanto for cannabis – had initially looked to raise £3m to support its growth plans and eventually settled on £6m after being oversubscribed to a multiple of four.
Esperanto For Cannabis
Mr Tamir believes this is the start of a new era for the UK cannabis industry: “The cannabis revolution is already something; we have reached a tipping point and it won’t stop here.
“The first two companies listed in Israel in 2018 creating the path for others to follow, and then there was a gap of six months-or-so before the second wave arrived.
“This will be much bigger; the risk is now lower and they will have seen the success of the first ones. We now have over 25 businesses listed on the Tel Aviv exchange and I expect to see more than double that amount in the UK.”
As it works towards medical cannabis regulatory approval Kanabo has launched a range of VapePod CBD wellness products into the German and UK markets.
The £6m will be used to commercialise the wellness product line, for the launch of the first clinical trial on a cannabis vape formulation and to support further growth.
Kanabo currently employs around 10 staff in the UK and Israel and is looking to double that over the coming months with new sales and R&D hires.
Speaking to BusinesCann earlier Spinnaker Chairman Andy Morrison said: “It’s been a long-time coming. There have been lots of twist and turns but they are all done. They (the FCA) have stamped it, and we’re going. the door is open now. So companies with good solid businesses, and who go about it in the right way should find no issues.”
Kanabo was supported in its LSE listing by Peterhouse Capital and law firm Hill Dickinson.
THE BIRTH OF KANABO
ISRAEL has had a medical cannabis programme for the last 14 years and in 2012, a 32-year-old Avihu Tamir was advised by his neurologist to try it for an on-going issue with migraine.
At a first class on how best to ensure its effective delivery Avihu was given a lesson on how to roll a joint.
“Some of the patients had never smoked before and one of then was being teated for cancer – it was bizarre,” he told BusinessCann.
Avihu saw an opportunity and began importing flower vaporisers which proved to be an immediate success securing partnerships with six out of eight of the licensed producers.
But, with patients still having to use flowers in its vaping devices Avihu sensed an overhaul was required and in 2018 he established Kanabo.
“Cannabis will never be a proper medicine in the eyes of physicians if it comes as a flower which has to be smoked.
“We realised there was a gap in the market and set about making a medical device – and engaging with the medical community – that would effectively be better than a ‘recreational cigarette’.
“The VapePod has been well received. There is no other vaporiser in the world that is recognised as a medical device and that can produce a measured dose of an extract of cannabis,” he said.
Kanabo has undertaken animal trails in partnership with medical professionals on some 50-or-so different cannabinoid formulations with more in the pipeline.
The results will allow it to fine-tune a range of viscous, wellness and medical cannabis oil formulations for the VapePod.
