Despite a number of positive announcements coming from the UK this week, British cannabis stocks failed to match the dramatic upswings experienced by their US counterparts.
Philip Morris, the world’s largest tobacco seller, was reported to be considering a major push into the cannabis sector via its controversial acquisition of Vectura, a firm that makes drugs to combat the diseases caused by smoking for the NHS.
Meanwhile UK media stalwart Channel 4 made a surprise investment in medical cannabis operator Cannaray via its investment arm.
Towards the end of the week, reports emerged that a significant new trial into the effects of cannabis on chronic pain is set to be launched in the UK, seen as a potentially major step towards making cannabis treatments available on the NHS.
SEED Innovations, the AIM-listed portfolio investment firm, saw its stock jump over 10% last week following news of a fundraise at its German medical cannabis investee Eurox Group.
On April 6 Eurox announced that it had successfully raised €4.4m in new capital, including €2m from new institutional investor Iberis Bluetech Fund, and a further €2.4 from existing investors including SEED.
According to SEED, which holds an 8.85% stake in Eurox, assuming the entire share capital of Eurox is based on the share price of the fundraise, SEED’s holding would now be valued at just over €5m.
This would infer an increase in its Net Asset Value (NAV) of around £1.5m.
According to its latest financial figures SEED’s NAV stood at £23.4m on September 30 2021, representing around 10.98p per ordinary share.
Shares in the company jumped from £0.0455 to £0.0505 throughout the week, spiking some 11% on the announcement.
Eurox said it is now well positioned to become a vertically integrated cannabis company in Europe, adding that it is one of the few companies to have launched cannabis extracts in Germany.
SEED’s CEO Ed McDermott added: “The support seen for this fundraise, completed at a 62% premium to our initial investment, is testament to the brand and its growth potential and I am particularly encouraged to see a new institutional cornerstone the Fundraise.
Intercure & Israeli Cannabis Stocks
Intercure posted a barnstorming set of financial results this week, reporting record revenues of $33m for its fourth quarter of 2021, representing a 29% increase.
Profits followed a similar trend, seeing adjusted EBITDA jump 140% year-on-year to $9m.
This represented the eighth consecutive quarter of double-digit growth, estimating an annual run rate of $130m.
While this was also the sixth consecutive quarter of positive cash flow from operations, Intercure still reported an estimated net loss of $1m.
Despite the positive financial figures, Intercure’s stock dropped by over 5% on the Tel Aviv Stock Exchange this week, mirrored by its peers Panaxia and Seach.
According to Cannabis Capital, this reflected a wider downturn, with all but three cannabis companies traded on the Tel Aviv Stock Exchange, Tikun, Intelicanna, and Cannomed experiencing drops.
Akanda has continued to ride the wave of positive developments in the US, leading to yet more significant gains last week.
After launching its IPO in mid March, Akanda’s stock jumped from its opening price of $4 to highs of $11 in the following days.
Since then it’s been trading at around $8, but this week it jumped back to the heights seen in the immediate aftermath of its listing, topping $11.10.
Its blistering run has been aided by the US House of Representatives voting to pass the Marijuana Opportunity Reinvestment and Expungement (MORE) act onto the senate.
While it’s unlikely to pass through to the upper house of Congress, the bill would effectively legalise cannabis federally across the US.
Akanda’s majority shareholder Halo Collective recently announced the launch of the first of three branded dispensaries in Los Angeles, creating a frictionless pathway for Akanda to capitalise on the US market.
While this bill is unlikely to pass due to the proposed scrubbing of conviction records, HAN ETF’s Nawan Butt, who manages its Medical Cannabis ETF, said the more politically moderate Cannabis Administrative and Opportunity (CAO) Act had better chances.
The bill is expected to be introduced later this month.
Chill Brands shares rose by nearly 30% this week, despite not releasing any major updates or RNS’.
The CBD retailer did see 13 of its products included on the Food Standard Agency’s (FSA) Public List, meaning it will legally be allowed to continue selling these products in the UK.
However, many of its peers including Love Hemp and Yooma Wellness also had a number of products make it to the next stage of approval, but saw their stock prices remain flat throughout the week.
Elsewhere Chill Brands, which started life as an oil and gas company called Highlands Natural Resources, was finally moved from the natural resources industry classification on the LSE to ‘Health Care’.