The challenges of institutional investors in the European hemp market

European firms are laying the groundwork for the expected increase in stock sales, in anticipation of mergers and acquisitions, as companies seek to capitalize on the growing stigma in Europe for recognizing the therapeutic properties of cannabis. A certain number of hemp companies are already striving to raise capital on the London Stock Exchange, both on the main (The Financial Services Authority, FSA) and on the alternative (The Financial Services Authority, FSA) sites.

At the moment, the European hemp market is practically not interested in international institutional investors. Sativa Investments Plc, London’s largest hemp company, is valued at $ 33.6 million. This is when investments in the financial assets of Canadian hemp market leaders amount to billions of dollars: Canopy Growth Corp. - the market value is estimated at $ 16 billion; Tilray Inc. - about $ 7 billion; Aurora Cannabis Inc. - about $ 7 billion

At first glance, the hempiness of the hemp market in Europe may seem to be a positive factor, since the region has so far avoided the market hemp madness that has befallen North America. The situation in the investment sphere of Canadian hemp breeding more and more resembles the market bubble “inflated” by the general enthusiasm for shares of cannabis companies, most of which are not secured by relevant assets or part of the market controlled by them. The Canadian hemp companies' investment boom was triggered by an unprecedented investment by large food and beverage companies in this business (an investment transaction from Constellation Brands Inc. with Canopy Growth).

In spite of this, European hemp companies are active, trying to show themselves to potential investors in order to use the interest in cannabis production to attract large financial investments:

- English Spinnaker Opportunities Plc. decided to take over Kanabo Research Ltd., which specializes in the development of medical hemp oil formulations, which, among other things, has the right to sell pharmaceutical quality cannabis vaporizer;

- French Gour Medical AG, which produces medicines for pets, is ready to invest in the development of medicines for the treatment of our four-legged pets, using drug-free cannabinoids;

- Danish StenoCare A / S has become a public company and plans to cultivate medical cannabis in the near future;

- German pharmaceutical company Dermapharm Holding SE significantly increased the market value of its shares after it decided to acquire a part of a Dutch company that grows medical cannabis used for pharmaceutical purposes.

According to a number of specialists in the European hemp market, bankers became one of the first stakeholders to take into account the situation in the Canadian market and interested in the networking opportunities of European hemp firms.

Until recently, the Canadian hemp market was followed by small financial institutions. Now this is a huge number of firms providing various types of services, providing mergers and acquisitions transactions, access to trading floors, large financial markets, etc.

Another significant problem is that Canadian hemp market leaders already have significant support from American and European institutional investors. Tilray, Aurora and Canopy Growth are actively working in the direction of expansion into the EU in order to build relationships with government officials responsible for this and to take advantage of the advantages of the liberalization of the European market in the coming years.

In turn, European firms are laying the groundwork for the expected increase in stock sales, in anticipation of mergers and acquisitions, as companies seek to capitalize on the growing stigma in Europe for recognizing the therapeutic properties of cannabis. A certain number of hemp companies are already striving to raise capital on the London Stock Exchange, both on the main (The Financial Services Authority, FSA) and on the alternative (The Financial Services Authority, FSA) sites.

Commentary of the Association "Ukrainian technical hemp"

It will be difficult for European hemp companies to “catch up” with industry leaders from Canada. Europeans will have to spend significant financial resources on researching the efficacy and safety of their products, ensuring the reliability of supplies, lobbying for changes in the regulations of both individual countries and relevant EU resolutions. Among other things, it is necessary to raise the confidence of potential investors in the industry, undermined by the dot-com boom and cryptocurrency passion. Among other things, it is necessary to carry out explanatory work aimed at distinguishing the concepts of technical / medical / recreational cannabis and not identifying the plant with drugs.