Investing in Cannabis: Stocks to watch

Last week, the European Commission and the European Medicines Agency (EMA) announced the approval of the first cannabis-based medicine for childhood epilepsy, which is expected to become available in the UK soon.

Figures from GlobalData Retail estimate that the regulated UK market will be worth £1.6bn over 2019, and will generate almost £490.4m for the country. The European market as a whole is due to grow 400% over the next four years, says the Brightfield Group. The cannabis market is growing fast in many countries around the world, especially as cannabis-based medicinal products become more widely available. It is clear that this growth is set to continue in the near future.

Specialists forecast that the UK cannabis market will increase in size over the coming years. Daragh Anglim, Managing Director at the cannabis consultancy Prohibition Partners, told the FT that last year’s legalisation of medicinal cannabis ‘breaks the stigma’ and that he expects the UK market to open up to recreational use within three to five years. Prohibition Partners says the UK cannabis markets could be worth £16.5bn in the next 10 years.

Stefania Barbaglio, Founder and Director of Cassiopeia Services, an Investor Relations company working closely with cannabis projects says: “The cannabis market, specifically medicinal cannabis and its derivatives, are among the hottest trends for investors to watch. The market is still at an early stage, with many opportunities for returns in the medium and long run, and we can expect more exciting news to unfold within this space in the coming months. There is a growing movement to destigmatise the use of cannabis for therapeutic purposes, which is reflected directly in the inflow of companies and investments in this sector in the stock market.”

With the opportunities brewing and more cannabis companies landing in the market, Cassiopeia has selected a few cannabis stocks for investors to take note of and watch out for as the market blooms in the UK and Europe:

Stocks on the London Stock Exchange:

Associated British Foods (LSE: ABF) is a diversified group of businesses, each of which enjoy a high degree of autonomy in the running of their operations. They are grouped into five business segments: Sugar,Agriculture, Retail, Grocery, and Ingredients. ABF has established the capacity to produce cannabis-based products in Norfolk.

Zoetic International (LSE: ZOE), The previous oil and gas company Highland Natural Resources (HNR) has transformed itself into a cannabis business, using its interests in oil and gas to found its new venture. The company has two commercial brands in the US and is now selling CBD tinctures in the UK, aiming to expand its reach to Europe.

“Our immediate priority is to advance the discussions currently underway with potential retail and wholesale partners, purchase manufacturing equipment and expand our outdoor growing, ahead of our intended harvest of our first 10,000 hemp plants by mid-2019,” said CEO and executive Chairman Robert Price.

Integumen PLC (SKIN) is a personal care products company that has established a special division within its team to process and refine CBD to create a product for wound and burn care. The company will use its own labs and leverage on its skincare expertise for the development of the cannabis-based product.

Futura Medical (FUM) is a research and development business specialised in producing transdermal technologies. In September, the company entered into a joint venture agreement with CBDerma Technology Limited to develop a skin-friendly cannabidiol (CBD) formulation.

Cannaray, a British medical cannabis company, raised a £7.8m on a Series A Funding round and aims to raise more than £30m in the coming year in the hope of floating the £100m value on the London Stock Exchange. The company is also set up in Ireland to ensure operations are not disrupted by the uncertain terms of Brexit and to keep access to the European market.

Kanabo Research, an Israel-based medicinal cannabis company is reportedly looking into listing on the London Stock Market. Kanabo has a promised investment of £1.5m from cash shell Spinnaker Opportunities.

Founder Avihu Tamir says: “We have a route for generating cash and revenue almost immediately, but we have potential for much more than that. You’re growing fast or being bought and when you need to grow fast it’s much easier to do it as a public company — the London Stock Exchange gives you that added value.”

Sunrise Resources (SRES) is a natural resources company working to generate profits from the growing cannabis market. Sunrise has signed an agreement to lease a grinding and mineral processing plant near to its CS Pozzolan-Perlite project in Nevada, USA. There is an increased demand for the use of perlite due to the expanding cannabis market in North America.

Stocks on NEX Exchange:

Sativa Group PLC (NEX: SATI) is the UK’s leading quoted medicinal cannabis and wellness cannabidiol (CBD) group, focused on the smart-sourcing of the raw material, advanced extraction, manufacture, testing, distribution, and research & development of medicinal cannabis and CBD products. The company raised £1.1m through the IPO on the capital’s NEX exchange in 2018.

Two UK operating subsidiaries, PhytoVista Laboratories and George Botanicals, are already well established and fully trading in independent CBD testing and CBD wholesale and retail. A new subsidiary, Goodbody Wellness, a CBD retail chain, has been launched in 2019.

World High Life Plc (NEX: LIFE) is a CBD and medicinal cannabis company which started trading on NEX Exchange on September 12. The Company’s investment strategy will focus on markets that are internationally recognised as having well-developed and reputable laws and regulations relating to the research and production of medicinal cannabis, hemp and CBD, as well as therapeutic cannabis derivatives.

“We believe that there are numerous investment opportunities here in Europe that will generate great returns for our shareholders, and we look forward to updating the market with our developments,” said Chairman and CEO David Stadnyk.

AfriAg Global Plc (NEX: AFRI) is a global logistics investment company, focused on the acquisition of direct and indirect interests in projects in logistics sector. In September, the company announced the Opening of Global Center for Medical Cannabis Therapy in Jamaica by Apollon Formularies Jamaica, one of AfriAg investments.

Freyherr International Group (NEX: FRYR) Freyherr International is the UK parent of a mainly Slovenian-based company which grows cannabis and manufactures cannabis-derived concentrates and extracts, focusing its operations within the EU. The company currently grows cannabis in Slovenia and has interests in other production projects. The company has been trading on NEX since August 13.

Block Commodities (NEX: BLCC) is an agritech company aiming to maximise value in African agriculture through the deployment of blockchain technologies. The Company works closely with African farmers to help raise agricultural productivity and to secure better returns for their produce. Building on well-established connections and technology expertise, the Company has expanded its operations into include the medicinal cannabis market with the strategy to produce and process cannabis-based products via licences in Africa, to supply the growing demand in Europe.

Imperial X Plc (NEX: IMPP) is a company seeking investment in the developing market for producing and/or distributing Medicinal Cannabis, its derivatives and/or related products. The company moved into cannabis investments in January 2019, with the accelerating trend towards legalising the use of medicinal cannabis products not only in the UK but in other countries around the world.

Ananda Developments (NEX: ANA) is a company investing in cannabis projects. The Company will seek investments in companies and projects in jurisdictions which have well-developed and reputable laws and regulations for the research and production of Cannabis, and in jurisdictions that are signatories to the United Nation’s conventions on narcotics.

Renowned international stocks with footprints in Europe and the UK:

Aurora Cannabis Inc. (TSX: ACB) (OTC: ACBFF), Headquartered in Canada Edmonton, Alberta and with sales and operations in 14 countries, Aurora is one of the world’s largest and leading cannabis companies. The company announced plans to expand its market to include vapes, concentrates, and edibles. Through a combination of new and enhanced facilities, Aurora intends to produce new, high-quality cannabis-related products across different categories.

“Aurora is the world’s leading producer of high-quality cannabis and we’re ready to introduce high-value product additions to this improved, federally legal market,” said the Company’s CEO Terry Booth.

of marijuana for medical purposes. The company operates in Canada and in Germany, with production facilities in Ontario. The company has subsidiaries in Switzerland and Germany, and has recently obtained a license for growing medical marijuana in Malta. Wayland can also be found in the UK and Italy.

The Yield Growth Corp. (CSE: BOSS) (OTCQB: BOSQF) announced an agreement for distribution of cannabis-related products in Greece and Cyprus. Urban Juve, the company in the agreement, plans to register 10 more products for sale in the EU within the next few months.

“This is the first of many territory specific distribution agreements we expect to enter into,” says Penny Green, CEO of Yield Growth. “We are currently in negotiations with distributors for France, Poland, the United Kingdom and Turkey with upcoming meetings set to discuss South America, Germany and Portugal.”

HEXO Corporation (NYSE: HEXO) (TSX: HEXO) is another company leaving its footprint in the European market as the company announces the award of its medical cannabis installation license to establish cultivation, processing and manufacturing facilities, issued by the authorities in Greece.

“This is a major step for HEXO as we continue to execute towards becoming a top three global cannabis company,” said Sebastien St-Louis, HEXO Corp CEO and co-founder. “Receiving licensing in Greece will allow us to bring know-how and brands powered by HEXO to the European market. The new facility will also drive value for current and future Fortune 500 partners by giving them access to licensed infrastructure internationally with the vision of capturing first-mover advantage in the burgeoning European cannabis market.”

FINANCIAL FOX PANEL DISCUSSION: CANNABIS

PR Guru Stefania Barbaglio hosted a panel discussion on FinancialFoxTV with three international experts in the cannabis: American surgeon Dr. Frank D’Ambrosio, global campaigner for cannabis policy reform; Peter Reynolds, president of the UK largest private cannabis policy group CLEAR Cannabis Law reform; and finally Christopher Snowdon, Head of Lifestyle Economics at the Institute of Economic Affairs. All three are in favour of government action on the legalisation of cannabis, for the benefit of society and the economy. #MUSTWATCH

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Investment Opportunities in the North Sea, Investors Eye Independent Oil & Gas

“I believe there’s still a great deal of opportunities to be exploited in the North Sea”, says Independent Oil & Gas, CEO Andrew Hockey. Combining a good portfolio of assets, the right partners with a favorable outlook for oil & gas investment, the AIM-listed oil & gas producer and developer looks forward to future plans.

In the latest episode of the Financial Fox, presenter & oil/gas strategist Stefania Barbaglio spoke to Andrew Hockey. The company have been going through an exciting period over the last three months having established a partnership with CalEnergy Resources (CER), to develop IOG’s Core Project and the recent spud of the Harvey Appraisal Well, in the North Sea.

CalEnergy are not only an active oil & gas operating company but the subsidiary of Berkshire Hathaway whose founder is the famous American business magnate Mr. Warren Buffett. Andrew Hockey hailed the partnership with CER as a “landmark transaction” for IOG, which he said would “deliver very significant value” for shareholders.

Independent has a strong focus on UK assets, particularly in the Southern North Sea, which encompasses gas assets containing reserves, contingent resources and prospective resources, able to deliver over 600 billion cubic feet of gas.

The portfolio is designed to take IOG from small to mid-cap company status. With the UK importing more than half of its gas, Hockey believes the domestic market represents an attractive opportunity for them.

Rising United Kingdom Oil & Gas Investment

There have been relatively few farm-out deals in the North Sea since the downturn in the oil market in 2014. But now, this trend seems to be turning upwards. The recently signed partnership with CalEnergy is one of two farm-out deals in the North Sea, showing good prospects for natural resources investment in the area.

In 2018, oil production rose to 1.09 million barrels (bbls) per day, an increase of 8.9% from 2017 and the highest UK oil production rate since 2011, according to the UK Oil & Gas Authority. The 2018 production covered 59 percent of the country’s oil and gas demands.

In 2019, UK oil and gas upstream investment is expected to witness a projected 4% increase. Reflecting this increase, this year, O&G exploration in the UK could see drilling of up to 15 new wells, says the 2019 business outlook from Oil and Gas UK.

Sentiment is increasingly positive in other parts of the world, which could signal a boost in the natural resources space. Oil analysts in the US are confident that we may be close to another oil boom over the coming years. “Investors would be wiser to purchase oil assets at a discount in anticipation of a medium-term price boom,” said Bob McNally, president of consulting firm Rapidan Energy Group on CNN Business.

The gas share of the sector also shows positive prospects for investors. Gas production in the UK in 2018 totaled 40.6 billion cubic metres, which maintains the UK’s status as a major gas producing country. Overall in Europe, second behind Norway, where the majority of UK gas imports come from.

In 2018, natural gas represented nearly 40% of UK’s primary energy usage, growing from the previous year. A factor that has increased gas demand is the continued shutting down of coal plants, resulting in a greater reliance on gas for electricity and LNG terminals.

The North Sea opportunity: Harvey Appraisal Well

UK production in the North Sea had a profitable period in the 1980s and 90s. Highest annual production peaked in 1999.

More recently the North Sea continental shelf has become a mix of energy resources, such as fossil fuels, wind and developments in wave power. The UK, along with Norway, are the largest holders of oil reserves in their respective licences.

IOG’s most exciting prospect is the Harvey Appraisal well, located at the heart of their core asset base in the Southern North Sea, with more than a 60% chance of success, results should be known in two months. Harvey has the potential to be the largest gas discovery in the company portfolio and could significantly enhance the economics of IOG’s Southern North Sea business.

About the advantages of exploring in the North Sea, Hockey says, ‘As an area of the North Sea, the Southern North Sea is probably the most benign to operate in. Water depths are relatively shallow therefore decommissioning liabilities are relatively low. You can use jack-up rigs so it’s fairly simple to operate. You are not far from shore. So, you have many things in your favor in terms of minimizing the execution risk of actually getting things done at the Southern gas place.”

Hockey believes that the Harvey well could deliver 85–199 bcf of gas for IOG: “Harvey could be a major catalyst for the business.”

Follow us on @Cassiopeia_ltd and @_FinancialFox for more smart investment tips to come. Stay tuned!

Investment Opportunities in the North Sea, Investors Eye Independent Oil & Gas

“I believe there’s still a great deal of opportunities to be exploited in the North Sea”, says Independent Oil & Gas, CEO Andrew Hockey. Combining a good portfolio of assets, the right partners with a favorable outlook for oil & gas investment, the AIM-listed oil & gas producer and developer looks forward to future plans.

In the latest episode of the Financial Fox, presenter & oil/gas strategist Stefania Barbaglio spoke to Andrew Hockey. The company have been going through an exciting period over the last three months having established a partnership with CalEnergy Resources (CER), to develop IOG’s Core Project and the recent spud of the Harvey Appraisal Well, in the North Sea.

CalEnergy are not only an active oil & gas operating company but the subsidiary of Berkshire Hathaway whose founder is the famous American business magnate Mr. Warren Buffett. Andrew Hockey hailed the partnership with CER as a “landmark transaction” for IOG, which he said would “deliver very significant value” for shareholders.

Independent has a strong focus on UK assets, particularly in the Southern North Sea, which encompasses gas assets containing reserves, contingent resources and prospective resources, able to deliver over 600 billion cubic feet of gas.

The portfolio is designed to take IOG from small to mid-cap company status. With the UK importing more than half of its gas, Hockey believes the domestic market represents an attractive opportunity for them.

Rising United Kingdom Oil & Gas Investment

There have been relatively few farm-out deals in the North Sea since the downturn in the oil market in 2014. But now, this trend seems to be turning upwards. The recently signed partnership with CalEnergy is one of two farm-out deals in the North Sea, showing good prospects for natural resources investment in the area.

In 2018, oil production rose to 1.09 million barrels (bbls) per day, an increase of 8.9% from 2017 and the highest UK oil production rate since 2011, according to the UK Oil & Gas Authority. The 2018 production covered 59 percent of the country’s oil and gas demands.

In 2019, UK oil and gas upstream investment is expected to witness a projected 4% increase. Reflecting this increase, this year, O&G exploration in the UK could see drilling of up to 15 new wells, says the 2019 business outlook from Oil and Gas UK.

Sentiment is increasingly positive in other parts of the world, which could signal a boost in the natural resources space. Oil analysts in the US are confident that we may be close to another oil boom over the coming years. “Investors would be wiser to purchase oil assets at a discount in anticipation of a medium-term price boom,” said Bob McNally, president of consulting firm Rapidan Energy Group on CNN Business.

The gas share of the sector also shows positive prospects for investors. Gas production in the UK in 2018 totaled 40.6 billion cubic metres, which maintains the UK’s status as a major gas producing country. Overall in Europe, second behind Norway, where the majority of UK gas imports come from.

In 2018, natural gas represented nearly 40% of UK’s primary energy usage, growing from the previous year. A factor that has increased gas demand is the continued shutting down of coal plants, resulting in a greater reliance on gas for electricity and LNG terminals.

The North Sea opportunity: Harvey Appraisal Well

UK production in the North Sea had a profitable period in the 1980s and 90s. Highest annual production peaked in 1999.

More recently the North Sea continental shelf has become a mix of energy resources, such as fossil fuels, wind and developments in wave power. The UK, along with Norway, are the largest holders of oil reserves in their respective licences.

IOG’s most exciting prospect is the Harvey Appraisal well, located at the heart of their core asset base in the Southern North Sea, with more than a 60% chance of success, results should be known in two months. Harvey has the potential to be the largest gas discovery in the company portfolio and could significantly enhance the economics of IOG’s Southern North Sea business.

About the advantages of exploring in the North Sea, Hockey says, ‘As an area of the North Sea, the Southern North Sea is probably the most benign to operate in. Water depths are relatively shallow therefore decommissioning liabilities are relatively low. You can use jack-up rigs so it’s fairly simple to operate. You are not far from shore. So, you have many things in your favor in terms of minimizing the execution risk of actually getting things done at the Southern gas place.”

Hockey believes that the Harvey well could deliver 85–199 bcf of gas for IOG: “Harvey could be a major catalyst for the business.”

Follow us on @Cassiopeia_ltd and @_FinancialFox for more smart investment tips to come. Stay tuned!