The U.K. cannabis market is being stymied by a lack of prescriptions and ‘bonkers’ regulations against flowers which see growers destroying their crop’s most valuable asset.
But, top City lawyer Nick Davies, of Memery Crystal, says a wall of money is waiting to be unleashed into the U.K market. And, in time, he expects to see homegrown British businesses play a leading role in the global cannabis industry.
Mr Davis was speaking at a Cannabis Europa debate on Business Leadership with Tjalling Erkelens, the founder of Bedrocan, and Nicholas Vita of U.S. cannabis firm Columbia Care, hosted by Sunday Times journalist Sabah Meddings.
U.K. Market Listings Imminent
He said: “The U.K capital markets now open to cannabis and we are looking at four IPOs, (Initial Public Offerings) with three of these on the main market and one on the junior AIM market.
“The regulars in the U.K are conservative, they are taking their time to make sure the building blocks are in place. The initial investees are wealthy families and high net-worth individuals, but the institutional investors will follow.” He later told CBD Testers that all of the IPOs were by overseas firms and elaborated on some of the difficulties affecting the homegrown industry.
“There is no appetite from the Government to grant licenses for cannabis, there are not enough prescriptions being given through the NHS (National Health Service) and it’s too expensive for private treatment. The NHS has to embrace medical cannabis as a credible treatment.
“However, my view is that the NHS will want to touch, see and feel where their cannabis is coming from and it’s highly likely this will provide opportunities for British businesses.
Destroying Flowers is Bonkers
“But we are still a long way from a homegrown company – other than GW Pharmaceuticals – selling their product globally, there is no appetite to grant licences in the way other countries are doing.
“British companies are trying to get licenses so we need to see the Home Office starting to grant more for medical cannabis growing. A good starting point would be for the U.K. to start growing its own CBD (cannabis and hemp) instead of having to destroy the flowers – which is bonkers.”
Mr Davis said he believed both fellow panellists – Bedrocan and Columbia Care – would eventually seek a dual listing on the London market. Mr Vita said the European market is still ‘three to five years’ behind that of North America.
Intoxicating, But How does it Work?
He questioned the valuations some of the North American companies are commanding and questioned some of the aggressive policies being practiced. He said: “It’s hard to compete against the three of four companies who are spending money like crazy.
“It’s intoxicating, we look at the numbers, but we don’t see how it works; Integrating businesses is difficult. For us, it might take a quarter more, but we will deliver success and shareholder value.” He went on to say that while its is difficult for cannabis medicine to be standardized, consistency is an expectation for all consumer products.
“Building a brand is a question of trust,” he added.
