FOLLOWING last week’s rally there has seen something of a lull with little movement for European cannabis stocks.
Last week’s bounce-back saw a number of double digit increases, including LSE-listed UK firm Cellular Goods which experienced a 40% rise over the week
Its stock rose again earlier this week climbing to 2.36p, before falling back closer to last week’s 1.9p, at the time of writing.
With the positive developments in Germany having been priced into the European markets for some time, a number of experts are pointing to events on the other side of the Atlantic for the recent upturn.
One keen UK market observer explained the recent improvements in Europe as follows: “I think July was the first positive month for Multi-State Operators (MSO) in a very long time.
US Cannabis Stocks Rally
“Across the pond, MSOs rallied last month with discussion of the Schumer/Booker Bill and the potential for the SAFE Banking Act to finally pass. This is the seventh attempt for SAFE to get through the Senate, so the battle with shorters remains,” he added.
However with summer shutdown now here and temperatures rising across Europe there may be little market activity for the coming weeks. He cautioned: “The markets are illiquid and not very exciting. We’re in the August lull!”
One of the few market announcements this week came from under-pressure UK firm Akanda. Following its recent turmoil, which led to the removal of the board by unhappy shareholders, it announced a new deal with German firm Cansativa to supply it with one tonne of dried cannabis flower from its Portuguese facility.
This led to a spike in the company’s share price on the NASDAQ to over 1.5p before it slipped back to around 1.2p at the time of writing.
Market Debut In 2023
The green rush, anticipated following the LSE debut of the first UK companies in early 2021, is yet to materialise.
One company – which signalled its intent to float in London – is UK CBD firm CiiTECH and in a candid interview this week its founder and CEO Clifton Flack elaborated on the state of play.
Speaking to Proactive Investors he said: “We thought that would open the floodgates to a whole swathe of cannabis companies hitting the London markets and raising huge amounts of capital.
“Well that didn’t happen, and it wasn’t just us and by the time we got to last summer, the hype had come off the markets a little bit, not just cannabis.
After Russia’s invasion of Ukraine, CiiTECH, took a step back. Mr Flack continued: “I know now with hindsight, six months on, it was the right decision. We weren’t able to raise the amount of money that we were hoping to raise so we would have had to have gone out with less money in the bank.”
Expectations of being able to do secondary funding rounds once public, again, were also unlikely to have happened, he added.
However Mr Flack remains bullish on its long-term prospects saying it is now looking to a 2023 listing.
The belief the US cannabis markets have bottomed is also shared by one of the industry’s leading lights; Alan Brochstein, of New Cannabis Ventures.
In his most recent weekly round-up he concluded: “The start of earnings season confirmed in our view that the bear market that began in early 2021 appears to be over.”