An Irish-led private investment group which is focused on the European legal cannabis sector is weighing up a multimillion-pound flotation as it looks to establish a network of specialist clinics in the UK and Ireland for patients wishing to access the drug.
Led by Dubliner Rob Reid, European Cannabis Holdings (ECH) is seeking to take advantage of a liberalising of laws to transform treatment options for people battling with chronic and debilitating conditions.
Established last year and headquartered in London, ECH this week closed a £3 million (€3.5 million) funding round – its second in less than six months.
The company, which was last month involved in the first legal importation of medical cannabis into the UK, recently appointed Canadian broker Canaccord Genuity to advise on a £100 million-plus initial public offering (IPO) in London.
Mr Reid told The Irish Times that while a listing was "just one of many possibilities the company was considering", it could accelerate growth for the group by providing improved access to capital markets, broadenings its ownership base and bringing better brand recognition.
Companies included in the ECH portfolio include market intelligence firm Prohibition Partners; conference organiser Cannabis Europa; and Astral Health, an organisation which facilitates medical cannabis imports into Europe.
Another portfolio company is the Medical Cannabis Clinic, which intends to establish a chain of specialist clinics across the UK to assist patients who have exhausted existing treatment options, and where medical cannabis has been proven to deliver therapeutic benefit.
The first clinic, which opens in Manchester later this month, will be led by Dr David McDowell, who issued the first prescription for medical cannabis in the UK in December. Other clinics are due to open later this year in London and Birmingham.
The opening of the chain of clinics follows the UK home office’s decision to legalise medical cannabis last November.
Despite the change in legislation in the UK, only a handful of patients have successfully accessed treatment via the National Health Service, and ECH is hoping to plug the gap by providing services for those who have struggled to obtain medical cannabis.
Mr Reid, formerly a co-founder of the Dublin-based digital agency In the Company of Huskies, said ECH is also keen on opening clinics in the Republic, should legislation be passed allowing use of the drug here.
“At a European Union-wide level there are now more countries who have legalised cannabis for medical use than have not, so a tipping point has been reached,” he said.
“We’re hoping to see movement on the issue in Ireland this year and if that happens I’d be very keen to open up our specialist cannabis centres, starting in Dublin,” Mr Reid added.
Research carried out by portfolio company Prohibition Partners, which was co-founded by another Irishman Stephen Murphy and led by the former head of marketing at Fáilte Ireland, Daragh Anglim, estimates that the European cannabis market will be worth €123 billion by 2028. Growth in the sector is being fuelled by new legislation in a number of European countries, including the UK, Germany and Italy. In the Republic, which is still considering a medical cannabis Bill, it is predicted the market could be worth up to €1.1 billion by 2028, with the total potential value of cannabis estimated as up to €2.3 billion.
Canadian-listed investment group SOL Global, a company in which Mr Reid is a director, is one of ECH’s primary backers. The Toronto-based group earlier this year acquired a 25 per cent stake in Irish medical cannabis company GreenLight, with an option to double its shareholding in the group.
Mr Reid said the various holdings ECH has provides it with an opportunity to shape the future of legal cannabis in Europe. He added that while a lot of the major players in big pharma and the tobacco industry were keen to invest in the sector, most were holding off until legalisation was enacted across the continent.
“It is still mainly early movers such as ourselves who are leading the way in the sector but there are lots of large corporations who are all looking on and waiting to make their move,” he said.