Research and development cannabis

The “Green Rush” is fast becoming an investor’s favourite when capitalising on high-risk opportunities and the demand for medicinal cannabis across the globe isn’t slowing down. Particularly as new drug discoveries emerge that show the efficacy of various cannabinoids as therapies for chronic conditions and diseases. One of the latest scientific discoveries was announced in March this year when a recent research study showed a beneficial effect on the involuntary shaking (tremor) caused by sclerosis and severe spinal cord injuries. [1]

When a start-up in the cannabis industry first emerges, they’re up against stiff competition… similar projects competing for the same end customers and patients. As with several medicinal cannabis start-up’s early stages, the share price is usually low and discounted due to its lack of assets and low valuation but also because of the high-risk factor, perhaps licenses are still pending, key infrastructure in development phases, but as the company progresses, further assets are built or acquired, such as:

  • Cultivation land
  • Construction teams mobilised and developing infrastructure
  • Licenses
  • R&D Centres that develop unique and marketable proprietary strains.

These assets once in place reduce the investment risk due to the growing intellectual property and fixed assets that the company needs to produce cannabis, legally and at scale.

A prime example of this happening is our Eco Equity project in Zimbabwe.

Now into the second round of funding, and an audited valuation by Baker Tilly the company’s combined assets are valued at US $210M (February 2020). [2]

The pre-IPO listing is set to increase pending a successful reverse-IPO. Meaning a potentially healthy liquidity event for our loyal shareholders.

Another leading example is Green Thumb Industries. Before its IPO, in the last year, the share price increased by 300% from $8.31 to just over $33. (February 2021)

More recently it announced the sale of up to $10 million of its subordinate voting shares.
Shares then jumped around 10% at that news and on 10th February Green Thumb closed at $38.45 per share. [2]

To put it simply, generally if you purchase cannabis shares in a public company you won’t experience that early-stage growth compared to buying shares in an early stage pre-IPO start-up.

You can keep track of financial information and stock market data across every industry and asset class at www.marketwatch.com

Alternative investments are high risk, and not for the inexperienced/unsophisticated investor or novice retail investor who should stick to stocks, bonds, and real estate – the traditional asset classes. But in a world where no investment is predictable or 100% risk-free – recently proven after a pandemic and a fuel crisis, seeking out the high risk but high yield investment opportunities is an increasingly savvy move and makes a high and fast growth difference to your portfolio.

Ready to explore your options? Contact one of our consultants to discuss the medicinal cannabis opportunities we have to offer here

References:

  1. https://www.news-medical.net/news/20210319/New-discovery-may-prove-vital-to-future-research-on-medical-cannabis.aspx
  2. https://www.proactiveinvestors.co.uk/companies/news/924580/eco-equity-valued-at-us210mln-by-consultancy-baker-tilly-924580.html