An American investment company has made its first move into the European cannabis space.

On Monday (September 23), New York-based Altitude Investment Management (AIM) announced a US$5.5 million investment into Switzerland-based cannabidiol (CBD) company KannaSwiss.


The privately held investment firm has described its new investment as “the leading supplier of top-tier CBD isolate products in Europe.”

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Roderick Stephan, co-founder of Altitude, told the Investing News Network (INN) that this move will help solidify the company’s stake in Europe as the market continues to develop over time.

“On the one hand, people think it’s going to evolve much more quickly because of this past experience in North America. On the other hand, the different countries and different opinions about medical cannabis, as well as about CBD wellness, make it a much different evolutionary path,” said Stephan.

He added, though, that Europe poses an “attractive risk/reward” factor because investors are still able to get an early position compared to the evolving markets in the US and Canada.

Stephan told INN in an email that AIM is attempting to gain the most out of its early mover status in the emerging European cannabis marketplace.

According to Stephan, the European market lags behind North America’s by three to four years.

Stephan cited KannaSwiss’ prominence in CBD extraction and its operational success as the main factors for AIM’s investment in the manufacturer.

Funds from the investment will be used by KannaSwiss to scale up its extraction operations for CBD isolate and distillate, and help it develop marketing for its line of branded CBD extracts, supplements and edible products.

The investment will also help KannaSwiss attempt to attain the ISO 9000 quality standard as well as good manufacturing practices certification.

The ISO 9000 quality management system, established by the International Organization for Standardization, is a set of international quality standards that helps companies maintain an effective quality assurance system.

KannaSwiss CEO Boris Blatnik said in a statement that the company is focusing on maintaining its reputation as a trusted CBD brand.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

“Swiss manufacturing holds itself to the highest standards, so I am confident that my team’s dedication to quality and innovation will produce a leading line of products on the European market,” he added.

One of the benefits of this transaction for AIM is the chance to operate in Switzerland, which has a higher tetrahydrocannabinol (THC) allowance for cannabis plants than other countries on the continent, according to Stephan.

In Switzerland, products made from cannabis plants that contain up to 1 percent THC can be bought and sold legally. Other countries in the EU have THC content capped at 0.3 percent.

Legislation on cannabis use is still fragmented across Europe, but analysts have been favorable about the continued growth of Europe’s cannabis space.

A report from Prohibition Partners projects Europe’s cannabis industry could be worth 123 billion euros by 2028. Estimates from Brightfield Group say the cannabis space in Europe was worth US$318 million in 2018 and could grow over 400 percent through 2023.

AIM plans to focus its efforts on private cannabis companies in Europe’s supply chain. Stephan said the firm plans on expanding its portfolio in Europe into 2020 with more investments, noting that the firm is also interested in exploring investment opportunities in Israel’s burgeoning cannabis research space.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 
Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, where he worked on lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now seeing a return to form by way of the excitement for an ongoing opening process in the US.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes for cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro environment pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s current potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business potential, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed to work on the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be at the moment.

 

Cannabis - Will The Fortune 500 Join The Party?

 
Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
 

While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance.

In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadians waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent an increase to their already thriving operations.

Keep reading... Show less

 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

Keep reading... Show less

Appointment of Dr. Kelmendi, Assistant Professor of Psychiatry at Yale University and co-founder of the Yale Psychedelic Science Group, brings another experienced medical professional to Lobe’s advisory team.

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the appointment of Benjamin Kelmendi, MD, Assistant Professor of Psychiatry at Yale University School of Medicine, to its Scientific Advisory Board.

Keep reading... Show less

Ayurcann Holdings Corp. ( CSE: AYUR ) (the “ Company ” or ” Ayurcann “), a Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, is pleased to unveil further details of its Phase 2 expansion plans.

Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

Keep reading... Show less