With MCG Pharmaceuticals becoming the first cannastock to list on the public exchange in London, and a plethora to follow in the coming weeks, what is the potential for a hot finance market blooming post-Brexit?
Even the Financial Times is excited about this one – the LSE is finally opening to cannabis stocks. Post-Brexit, the need to raise funds both to nourish the domestic market and to access the European one, will be critical.
However, the question remains, despite the ability to raise money (as in Canada and the U.S.), will the cannabis firms who rush to access such equity here use it any more efficiently than say their Canadian forebears?
Undoubtedly, the forward march of progress on the legislative front means that broadly the answer will be yes. That does not mean of course, that all the froth is gone from the market. But what it does mean is that London now has a viable market in which to raise funds for the industry at home and for operations across the continent. And the exchange may well, as a result, be a serious competitor for the Deutsche Börse. The fact that London is getting going with its own canna-equities offerings is also likely to stir the still fairly dormant conversation across the Channel – namely in Frankfurt.
By anyone’s standards, in other words, this is an exciting and much overdue development and promises a healthy injection of cash into an industry now chomping at the bit to roll out new products in the wake of reforms enacted during the Pandemic.
British Equity Is Needed in Several Places
There are several places that all this equity can flow. The first is obviously to established international firms (like MCG Pharma) with a footprint and a path to entry in the growing medical market across the continent.
The second, of course, is into burgeoning start-ups that are eyeing the current environment and beginning to think about strategic next steps in a world post Pandemic.
It is highly likely that Germans will want to see greater reform and push the agenda as the country prepares to go to the national polls. It is also highly likely that other Europeans will too. Beyond Europe, there are obviously other exciting possibilities ranging from Asia to Africa. The LSE is far from as sluggish as its European counterparts generally.
Accessing equity, in a way that is far more familiar to both North American and British firms becomes, as a result, even more important. This is, in other words, perhaps one of the rocket boosters the industry has long needed across the region.
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