Medical cannabis company Equinox International plans to be listed on the London Stock Exchange to raise money for a ‘state-of-the-art’ cultivation, extraction and production facility on a 20-hectare site in the UK approved by the Home Office.
The self-described ‘British cannabis master’ Equinox, which is the UK’s first ‘country-to-brand’, vertically integrated medical cannabis company, will offer retail investors the chance to access the listing via the PrimaryBid website.
The UK is currently importing 100 per cent of its medical cannabis, which was legalized in 2018, and Equinox says a homemade solution would make procurement less ‘expensive, complex and time consuming’, while improving quality, oversight and growth potential.
Equinox co-founder and CEO Xan Morgan said: ‘The UK medical cannabis market is expected to become one of the largest in Europe and Equinox has a significant first-mover advantage to build a UK champion and transform patients’ lives.’
Equinox has one of the first commercially scaled medical cannabis cultivation and production licenses issued by the Home Office, and after the IPO it hopes to build a pipeline of revenue through NHS medical sales and strategic supply partnerships.
It told investors on Thursday that its listing would allow it to leverage the ‘first-mover advantage’ while providing access to growth capital to develop facilities and to research and development.
The listing will also give the company “improved profile and visibility in the UK and across international cannabis markets”.
Equinox has not yet confirmed a fundraising target for its listing, but This is Money understands that the company is currently meeting with potential investors and will update the market with valuation information and funds raised once the book is built.
Although there is currently no fundraising target, £ 10 million of the fundraising qualifies for EIS and VCT related tax breaks.
The cannabis industry is expected to be worth $ 57 billion by 2027, according to data from Arcview Market Research and BDS Analytics.
Most countries still ban the supply of cannabis for recreational use, but many have legalized the plant in recent years for medical use.
The psychoactive chemical in cannabis that makes people high – THC – is still banned in the UK, but another chemical – CBD – was legalized for medical use in 2018.
The Center for Medicinal Cannabis claims that the UK CBD market is currently worth £ 300 million and could hit £ 1 billion by 2025 as more research on its health benefits is revealed.
But Equinox itself is bolder in its predictions and looks at an addressable market of £ 7.5 billion in 2028 with the potential to become one of the largest [medical cannabis markets] in the world’.
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The company would become one of several marijuana companies to list in the UK since 2018, including the developer of medical treatment products Kanabo and David Beckham-backed Cellular Goods.
Such stocks tend to be high risk for investors and akin to investing in start-up biotech companies.
Equinox co-founder and CEO Xan Morgan said: ‘The UK medical cannabis market is expected to become one of the largest in Europe and Equinox has a significant first-mover advantage to build a UK champion and transform patients’ lives.
“Our wholesale distribution strategy and country-to-brand focus will enable us to become a leading, vertically integrated medical cannabis company delivering consistent, high quality products.
‘With our management team’s experience in project delivery, operational management, strategic management and business development, we are well positioned to maximize this exciting opportunity.
“Through proprietary cultivation, the creation of IP-protected formulations targeted at NHS medical sales and strategic supply partnerships, we have the potential to target a significant share of the expected £ 7.5billiBn market in the UK in 2028.”