Medical cannabis business Equinox International is planning to list on the London Stock Exchange to raise cash for a ‘state-of-the-art’ cultivation, extraction and production facility on a Home Office-approved 20-acre UK site.
Self-described ‘British cannabis champion’ Equinox, which is the UK’s first ‘land-to-brand’, vertically integrated medical cannabis company, will offer retail investors the chance to access the IPO via site PrimaryBid.
The UK currently imports 100 per cent of its medical cannabis, which was legalised in 2018, and Equinox says a homegrown solution would make its procurement less ‘expensive, complex and time-consuming’, while improving quality, oversight and growth potential.
Co-founder and CEO of Equinox Xan Morgan said: ‘The UK medical cannabis market is forecast to be one of the largest in Europe and Equinox has a significant first-mover advantage to build a British champion and transform patients’ lives.’
Equinox is the owner of one of the first medical marijuana cultivation and production licenses in the UK. It plans to expand its revenues through strategic supply partners and NHS medical sales.
It told investors on Thursday that its IPO would allow it to capitalise on ‘first first-mover advantage’, while enabling access to growth capital to develop facilities, and for research and development.
The IPO would also give the firm ‘enhanced profile and visibility in the UK and across international cannabis markets’.
Equinox is yet to confirm a funding target, however This is Money understands that Equinox is in talks with potential investors. We will also update this market once we have more information about valuation and the funds raised.
While there is currently no fundraise target, £10million of the fundraising qualifies for EIS and VCT related tax relief.
Arcview Market Research, BDS Analytics and Arcview Market Research predict that the marijuana industry will reach $57billion in 2027.
Although most countries ban cannabis supply for recreational purposes, many legalized the use of the plant for medicinal use in recent years.
The psychoactive chemical in cannabis that makes people high – THC – is still banned in the UK, but another chemical – CBD – was legalised for medical use in 2018.
The Centre for Medicinal Cannabis claims the UK CBD market is currently worth £300million and could hit £1billion by 2025, as more research on its health benefits is revealed.
But Equinox itself is bolder in its predictions, eyeing an addressable market of £7.5billion by 2028 with the ‘potential to become one of the largest [medical cannabis markets] in the world’.
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This would make the firm one of many marijuana companies listed in the UK, including Kanabo-backed medical products and Cellular Goods-backed by David Beckham.
These shares can be risky for investors, and they are comparable to investing in new biotechs.
Co-founder and CEO of Equinox Xan Morgan said: ‘The UK medical cannabis market is forecast to be one of the largest in Europe and Equinox has a significant first-mover advantage to build a British champion and transform patients’ lives.
‘Our wholesale distribution strategy and land-to-brand focus will enable us to become a leading, vertically integrated medical cannabis company providing consistent, high-quality products.
‘With our leadership team’s experience in project delivery, operational management, strategic governance and business development, we’re well positioned to maximise this exciting opportunity.
‘Through proprietary cultivation, the creation of IP-protected formulations targeting NHS medical sales and strategic supply partnerships, we have the potential to target a significant share of the projected £7.5billibn market in the UK by 2028.’