AS Democrats condemn President Joe Biden’s almost complete lack of action on promises to enact cannabis reform at the federal level, progress across the rest of the world has continued at pace this week.
Italy became the latest European country to explore cannabis reform, as debates on whether it should go one step further than Spain and legalise personal use and home cultivation began in the Assembly of the Italian Republic.
Elsewhere Albania announced plans to open up production of medical cannabis, though it is understood this will be for export purposes only, while Bosnia and Herzegovina also made steps towards the legalisation of cannabis for medical purposes.
Kanabo experienced its largest stock price uptick since March this week, seeing its stock jump over 25% from historic lows on Tuesday.
The London Stock Exchange (LSE) listed company has, like almost all of its peers, endured a steady stock price decline for most of 2022, dropping from around 15p at the start of the year, to just over 2p at the start of the week.
However, since Tuesday, its stock price has jumped to around 3p, with some shareholders suggesting a single purchase of 720k shares worth £21k on June 6 helped swing sentiment in Kanabo’s favour.
It came just days after Spain’s congressional commission on health and consumption voted on Monday, June 27 to approve the legalisation of medical cannabis for therapeutic use, following weeks of debate.
News that Spain, one of the largest economies in Europe, could roll out a medical cannabis industry by the end of the year will have also encouraged positivity among Kanabo’s investors.
Two weeks earlier, Kanabo announced the creation of a new subsidiary focused on monetising its current intellectual property, dubbed Agritech, in which it holds a 40% shareholding.
It informed investors on June 16 that Agritech had signed its first memorandum of understanding (MoU) for the design, build and operation of a new 4000kg per year indoor cultivation facility in Spain.
This new facility, in which Agritech could hold up to a 20% stake, will focus solely on medical cannabis, putting it in prime position to capitalise on the new opportunities brought about by reform.
DeepVerge has managed to continue its recent run of success, seeing its stock jump by around 30% since lows of 9.5p at the end of June, now trading at 12.27p.
This has been aided by a flurry of releases from the company, beginning with the release of its final results for 2021, published on June 23, 2022.
This saw DeepVerge, which produces a range of CBD cosmetics, report revenues more than doubling throughout the year to £9.3m.
According to the company, orders during the financial period topped £10m, but it was forced to push nearly £1m worth of shipments back until Q1 2022.
Alongside the rising revenues, DeepVerge saw its EBITDA losses fall by 98% to £17k, down from £859k a year earlier.
While the company’s share price remained turbulent for around a week following its FY results, a further release on June 30 encouraged a more permanent ascent.
In an RNS, DeepVerge revealed that its Modern Water products had secured orders in excess of £3m in China and South Asia during Q2, set for delivery during the current financial year.
The news signalled a return to sales in one of the company’s most lucrative markets following months of strict lockdowns, in large part thanks to a diversification strategy, pivoting ‘from selling lower ticket equipment to medium and large enterprise solution sales’.
Days later, on June 4, the company released a further RNS regarding its Skin Trust Club subsidiary, announcing that it had generated more than £1m in sales and signed 20 new sales and marketing agreements so far in 2022.
The company said these developments would open up ‘multiple routes to potential new revenues and market audiences across the UK and US’.
Investors appeared to take the company at its word, seeing share trade volumes skyrocket throughout July, with some estimates suggesting the company could have already surpassed its total 2021 revenues this year.
German Stocks Decline
As Germany’s four expert panels came to an end last week, seeing the discussion shift firmly from ‘whether to legalise cannabis, to how’, a number of German cannabis stocks fell considerably.
Synbiotic, a German ‘buy-and-build’ cannabis company, which has acquired a string of companies since the start of the year, saw its stock dip by nearly 10% on the Frankfurt Stock Exchange since last week.
Meanwhile, medical cannabis operator Cannovum saw a nearly identical and seemingly counterintuitive decline.
Some have suggested the consolidation of efforts to roll out Germany’s recreational market may be having a negative impact on established German medical cannabis operators, amid fears of cannibalisation, alongside concerns the market may soon become oversaturated.
Cannovum’s CEO Pia Marten, who participated in the International Expert Hearing last week, said: “We are pleased that the federal government recognises the social reality and we are thus experiencing a historic moment.
“Never before has the legalisation of cannabis as a stimulant been discussed so seriously. The meetings of the consultation process have shown that we are no longer talking about whether to legalise cannabis, but how. The experiences of other countries have shown us that legalisation is in the interest of consumers and society, and I am very positive that we will find a good way for Germany.”