Medical cannabis opportunity gathers momentum in Europe.

Medical cannabis opportunity gathers momentum in Europe

Witnessing massive growth in North America, markets in Europe and the UK are welcoming the inflow of the so-called “pot stocks” — listed companies in the cannabis industry. There is particular attention to projects focusing on cannabis-based healthcare products, as more countries relax medical cannabis regulations.

Reports from Bloomberg evidence that cannabis medical companies have started contacting lawyers and investment firms, showing significant interest in listing in European markets, including the UK. In November 2018, the UK government gave the go-ahead for specialist doctors to start prescribing cannabis-based medicines. The move prompted the opening of the UK’s first cannabis clinic in the Greater Manchester area earlier in March, offering treatments for patients suffering from chronic pain and other severe neurological or psychiatric conditions.

Research from Prohibition Partners and the Davos World Economic Forum pointed that Europe’s medical cannabis market could double in size in 2019, and numbers show that Europe’s cannabis market could be worth up to €123bn by 2028.

The market excitement follows a wave of regulations that are allowing the advance of legal cannabis across the continent. Last year, apart from the UK, Portugal and Malta had also legalised medical cannabis products.

At the moment, the most prominent marijuana company is London’s Sativa Investments Plc at about 26.8 million pounds ($33.6 million) on the NEX Exchange, but this scenario is set to change throughout 2019. Newspapers in London have recently reported that Jacana, which grows medical-use cannabis in Jamaica, is considering a stock market float on city’s AIM later this year. Other companies showing plans to list are European Cannabis Holdings and Emmac Life Sciences.

Companies in continental Europe are signalling to make an early move into the cannabis scene, says Bloomberg. Paris-based Gour Medical AG, which plans to produce medical cannabis products for animals; StenoCare A/S from Denmark and Dermapharm Holding SE from Germany both focusing on medical and pharmaceutical cannabis applications.

Indeed, there is an opportunity in there: in Germany, around 40,000 patients are already taking prescription drugs based on cannabis, which amounted to more than 30 Million EUR revenues in the first half of 2018 — making the country feature among the three largest medical cannabis markets in Europe, along with the Netherlands and Italy.

All eyes on Southeast Asia for FinTech growth in 2019

Nations in Southeast Asia are reportedly among the hottest spots for FinTech opportunities in 2019. Growing economic activities and government incentives are attracting FinTech solutions to various sector. Reports show optimistic look for companies in the space of digital banking and payments, AI and blockchain technology.

A report from Deloitte published on 31 December 2018 estimated that FinTech investments in Southeast Asian countries in 2018 have exceeded the $5.7 billion invested in 2017 by up to 30%. Google’s e-Conomy SEA report anticipated the Internet economy in Southeast Asia to have increased by 44% in 2018. This robust growth is set to continue as the FinTech market is projected to reach US$72 billion by 2020.

Investment in technology is substantial in the area: technology firms represented a significant 40% of total private equity deals in Southeast Asia in 2017. In the Q1 2018 alone, more than $2 billion were invested in Asia tech companies; and more than 60% of investors from South East Asia say that technology is their focus area in 2018–19 — FinTech being the largest sub-sector, followed by Artificial Intelligence and Blockchain.

Organisations such as TechGrind have ambitions of making Southeast Asian nations the “home” to a new Silicon Valley, working to develop a healthy and attractive environment for start-ups to run their operations.

One of the main reasons underlying growth and adoption is insufficient financial inclusion which opens plenty of opportunities for fintech companies to implement and expand their reach. Across the region, less than 30% of the population have a bank account — in less developed countries such as Cambodia, this number falls to 5%.

Fintech solutions tap exactly into this enourmous gap between the unbanked population and access to financial services. Therefore, the demand for digital payment, mobile wallets and alternative finance is high and increasing.

In the Asia Pacific region, Singapore is the leading nation in the technology space, particularly regarding the development of smart cities and hyper-connectivity. In Indonesia, the largest economy in Southeast Asia, digital payment platforms are growing at a fast pace. Indonesians are the most connected population among emerging markets and very open to alternative payment methods. In 2018, Indonesian e-wallet OVO performed 75 times more transactions in comparison to 2017. The company’s focus is to increase the rate of financial inclusion in the country and support small and medium enterprises (SMEs).

According to government statements, Vietnam plans to become a cashless society by 2020, targeting to reduce the number of cash transactions to less than 10% of total payments in consumer-ends such as supermarkets, shopping malls and distributors. The plan includes proposals to develop and increase new payment methods in rural and remote areas of the country to boost financial inclusion as to at least 70% of Vietnamese over the age of 15 owning a bank account by the end of 2020.

In the blockchain sphere, Thailand is moving to become a more crypto-friendly market. Thai cryptocurrency exchange Satang Corp. said in December 2018 it plans to raise nearly $10 million in a security token offering (STO). According to the crypto media publication Cointelegraph, Satang plans are supported by the Thai government who is seeking to develop an appropriate regulatory framework for blockchain projects and cryptocurrencies, as well as turning the country into a hub for blockchain firms.

Beyond the financial sphere, tech is also making strides. In the news industry, for example, Google has launched the Google News Initiative Asia Pacific Innovation Challenge. The fund will be directed to projects which use innovative technologies to create and improve the quality of journalism in the area.

Southeast Asian nations represent the game-changing nature of FinTech and disruptive technologies, with cutting-edge applications causing social change and solid ground for investment and market expansion.

“Emerging markets represent the greatest opportunities for fintech companies. Southeast Asia is particularly attractive: it has a very tech-savvy population and governments who welcome new technologies,” says Stefania Barbaglio, Director of Cassiopeia Services, agency working in multiple projects in emerging economies.

“Tech enables leapfrogging in developing economies — FinTech solutions hold power to catalyse economic growth and societal improvements, so we will see big things happening in this space in 2019.”