AnalysisCannovum To Launch Secondary Listing, Panaxia Signals Exit From...

Cannovum To Launch Secondary Listing, Panaxia Signals Exit From Cannabis & Yooma Wellness Revenues Drop



German cannabis operator Cannovum announced this week that it was moving its shares onto the ‘Primärmarkt’ (Primary Market) of the Düsseldorf Stock Exchange. 

Days later, in an interview with German publication Frankfurter Allgemeine Zeitung, Cannovum said that it planned to launch a secondary listing on the larger Frankfurt Stock Exchange ‘by the end of the year’. 

Cannovum became the first fully licensed German cannabis company to launch a direct listing on the ‘open market’ of the Düsseldorf Stock Exchange in May 2021. 

After Cannovum launched onto the platform at €5, its stock price climbed to peaks of €8.2 in November 2021 following the announcement of Germany’s intentions to launch an adult use market. 

Since then, its price has gradually declined, and today sits at just under its initial listing price at €4.8. 

This week (December 1), Cannovum’s stock was moved to the ‘primary market’ of the exchange, a ‘separate segment especially for small and medium-sized companies’ trading alongside the regulated ‘open market’. 

This segment is understood to require a much higher level of transparency from companies, in what it describes as a measure to ‘underline (its) quality standards’. 

Cannovum’s co-founder Pia Marten said: “The change is an important step for us as a growth company. This demonstrates our claim as a market leader in the upcoming legal cannabis segment. This emerging market will account for well over €8bn in sales per year in Germany alone.”

In further signs Cannovum expects to see significant growth over the coming year, Ms Marten told FAZ that she expects her company’s shares to be listed on the largest of Germany’s seven stock exchanges, the Frankfurt Stock Exchange, ‘before the end of the year, which will once again significantly increase the trading volume’. 

She also laid out ambitious plans to ‘achieve 20% market share in the legal cannabis business in Germany’, corresponding to an estimated €1.6bn in sales. 

Panaxia Labs

Panaxia is understood to be moving away from cannabis, following a number of its Israeli counterparts into diversification in light of ongoing declines in share performance. 

According to a number of sources, Panaxia unexpectedly announced on Monday that it planned to close its current cannabis-related operations and sidestep into the finance industry. 

The company said that it has signed a memorandum of understanding with financial company Barak Beit Investment for a potential merger. 

This would see it leave the cannabis industry and sell off its current operations, including one of the very few fully licensed factories in Israel, and transfer its activities entirely to investments. 

Its proposed deal would see 60% of the company’s capital handed over in exchange, with the possibility of this growing to 85% depending on the performance of the newly combined entity, 

It is thought that Panaxia Global, its privately owned sister company which operates in North America, could buy its assets, though it is thought it may also decide to disconnect from the Israeli market. 

The merger could be hampered by a number of debts still owed to Mizrahi Bank and its CEO Dadi Segal, which total over 20m shekels, meaning the company may have to raise more capital. 

Despite being one of the leading players in the Israeli cannabis market, Panaxia has, like many others, struggled with the regulations surrounding exports and growing competition, forcing it to invest significantly in its operations abroad and add to its losses. 

Mr Segal told Globes: “Publicity has a price and currently does not give us many opportunities. The activity in Israel was not successful, and we are focusing abroad.”

Yooma Wellness

The Aquis-listed company released its Q3 financial results this week, reporting a sequential revenue decline of over 25%. 

In the three months to September 30, 2022, Yooma recorded revenues of $2.42m, up around 14% compared with the same period a year earlier. 

However, this represented its worst performance so far this year, dropping from $3.3m in Q2 and $3.2m in Q1.

The CBD and wellness operator, which took on a flurry of brands last year amid an ambitious M&A programme, also reported a significant drop in gross profits. 

In Q2, Yooma’s gross profits rose from $783k to $967k, but in Q3 this dropped by nearly 40% to $595k. 

Meanwhile, Yooma continued its ongoing reduction of losses, reporting a net loss of $624k for the quarter, down from $1.2m in Q2 and $3.1m in Q1. 

According to Yooma’s CEO Jordan Greenberg, this is largely thanks to the ongoing ‘cost-cutting measures we began implementing earlier this year’, which have also driven a 20% reduction in cost of sales. 

Meanwhile, the company says it is continuing to have ‘different opportunities for a sale of assets, M&A or other strategic transactions’. 

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