More on European Weed

This article originally was published here: https://www.greenchipstocks.com/articles/more-on-european-weed/91372

According to Prohibition Partners, which is a solid source for independent data analysis for the cannabis industry in Europe, Europe’s cannabis market is estimated to be worth as much as $140 billion by 2028, and likely becoming the world’s largest legal market over the next five years.

This comes from the group’s 4th edition of its European Cannabis Report.

Here are some highlights …

• In 2018, six European countries announced new legalization legislation.
• Greece and Macedonia are utilizing cannabis cultivation in an effort to support an ailing agriculture industry.
• With a market of more than 742 million people and total healthcare spend of $2.63 trillion , Europe will be the largest medical cannabis market in the world.
• European insurance companies in Italy, Denmark and Germany are now covering cannabis prescriptions.
• Early indicators from leading cannabis programs suggest that fulfilling medical cannabis prescriptions will become a basic requirement of any public healthcare policy.
• In 2018, Germany, Denmark, Malta, Greece and Italy discussed the possibility of a fully regulated adult-use cannabis market while Luxembourg has promised to introduce a regulated adult use market before 2023.
• Germany, Italy, The Netherlands, Denmark, Portugal, and Greece will be the forerunners in medical cannabis production.

Of course, there are still plenty of challenges, which include European policy makers and businesses having to find consensus on laws covering cross-border supply chains, the standardization of products, and commercial agreements.

And then there’s the simple fact that European nation’s are famous for muddled bureaucracy that tends to slow the pace of growth. I definitely see this being an issue in Europe.

Still, in terms of growth potential, Europe has a lot of it. And since some of the cannabis stocks with heavy exposure to Europe are largely being ignored, I’m happy to get us an early position in them.

If you have the time, definitely check out Prohibition Partners’ European Cannabis report. Here’s a link: https://prohibitionpartners.com/reports/

Mailbag

Hey Jeff,

Hope all is well. I know you are very busy but I wanted to get your thoughts on these 7 cannabis companies that may IPO in 2019. 

1. Dr. Kerklaan Therapeutics

2. Raw Garden

3. Cannalife Capital Corp

4. Magical Butter

5. Attis Trading Company

6. Verano Holdings

7. Pharmacielo

Sincerely,

Zach M.

Let’s go through these one by one …

Dr. Kerklaan Therapeutics

I actually use this brand for pain relief after a particularly hard work out or particularly hard day on the farm. Without a doubt, this is an excellent product.

The company has been fairly successful at raising capital, and management claims the company should do between $10 million and $15 million in revenues this year. The Dr. Kerklaan brand has also managed to get a decent amount of exposure. It’s been featured in Men’s Health, Rolling Stone, and Forbes.

Word is, Dr. Kerklaan Therapeutics is planning to file for an IPO this year, but to date, there has been no S-1 filing. Certainly if this happens, I’ll be very interested in learning more, as I do believe these folks have an excellent product with a solid reputation.

Raw Garden

Raw Garden is a concentrates company operating out of California. It’s a legitimate operation with a fairly solid reputation for quality. It’s been featured in Leafly, the Washington Post and Dope Magazine (now owned by High Times).

I’ve also read that Raw Garden plans to go public this year, but to date, we have no specifics on timing or pricing.

Cannalife Capital Corp.

Cannalife Capital is expected to go public this year. And I really like this one.

In fact, members of our Private Intel group were able to grab some pre-IPO shares of this one back September.

Cannalife Capital will be raising and deploying $100 million into private US companies. It’s already locked in some solid holdings, and management is actively reviewing about a half dozen more which would provide exposure to the following …

• A leading European (profitable) CBD e-liquid company
• A 25,000 acre Kentucky hemp cultivation and extraction facility
• A leading online CBD e-commerce website
• A revenue-generating European mid-sized generic drug manufacturer
• A 10,000 acre organic hemp cultivation and extraction facility in Nevada

I’m really looking forward to this one, and will likely add it to our Green Chip Stocks portfolio after its debut.

Magical Butter

I’ve been watching Magical Butter for a long time.

The company makes what is essentially a blender that allows you to make your own cannabis oils and infusions. It works well, and long-time cannabis consumers seem to have a real love for this thing.

The company has done quite well over the years, generating millions in revenue. Whether or not it can make money over the long-term is still debatable, though.

This machine is essentially designed to allow cannabis consumers the opportunity to make their own edibles. But as more and more states legalize, I wonder how much longer a machine like the one produced by Magical Butter will be relevant.

While I know plenty of folks like to make their own edible recipes, why go through all the hassle when you can just buy pretty much anything you need? I just don’t see a lot of new consumers seeking to make their own recipes when the edible varieties out there are just so massive. It’s definitely a niche product, and will always be a niche product.

Another thing to consider is that with this machine, you can still taste the cannabis. Quality edibles should be able to provide an enjoyable experience without a bad flavor. To me, a quality edible either has no cannabis taste or the terpenes in the plant are properly paired with the other ingredients. This is something we’ve seen Defonce Chocolatier do quite well.

This isn’t to say I would be opposed to buying the stock in an effort to make some quick cash in early trading. But long-term, I just don’t see it.

Attis Trading Company

Attis Trading Company is an Oregon-based, vertically-integrated cannabis operation.

I actually like these guys a lot, as they’re legitimately focused on sustainable farming and corporate social responsibility within the cannabis industry. They grow some really fine weed, too.

That being said, I have no data on revenues nor do I know how this thing will be priced. Once I get a hold of those details, I’ll dive deeper, as I would love to own a piece of such an honorable operation.

Verano Holdings

Verano Holdings is another operation that takes product quality and corporate social responsibility seriously.

The company is an Illinois-based cultivator and retailer. Certainly I like the idea of having more exposure to Illinois, as I believe the state will be legalizing within the next two years. Next to Michigan, it’s a very lucrative Midwest market.

Verano has done very well in terms of raising capital, too, having raised more than $100 million over the past couple of years.

If priced right, I’d be very interested in buying some.

PharmaCielo

PharmaCielo actually already went public this year. Just a couple of weeks ago, actually.

This is a company that our Private Intel members also got a piece of – pre-IPO.

We paid $2.00 a share. About five days after it went public, it hit a high of $11.50.

Today, the stock is trading around $8.75 a share. For Private Intel members (our sister site designed for accredited investors), this is obviously a major score. But for Green Chip Stocks investors, I’d hold off on buying any right now. It’s a great company with excellent exposure in Latin America, but I do expect to see this one sell off a bit in the near-term.

I have quite a few more mailbag questions to get to, and I’m hoping to get through them over the weekend. I’m also sifting through quite a bit data right now on a new pick I hope to have over to you next week. So keep a look out for that.

More to come …

Jeff

What I’m reading today …

European cannabis products have been more popular than expected: https://www.bnnbloomberg.ca/european-cannabis-products-have-been-more-popular-than-expected-1.1206256#_gus&_gucid=&_gup=twitter&_gsc=mTI1IBc

Go Inside Brooklyn’s First Medical Marijuana Dispensary: https://www.leafly.com/news/industry/go-inside-brooklyns-first-medical-marijuana-dispensary

Veterans Support Marijuana Legalization And Increasing Medical Cannabis Research: https://www.marijuanamoment.net/survey-veterans-support-marijuana-legalization-and-increasing-medical-cannabis-research/

This article originally was published here: https://www.greenchipstocks.com/articles/more-on-european-weed/91372

More on European Weed originally appeared in Green Chip Stocks. Green Chip Stocks, your personal guide to investing in green, sustainable, alternative, and renewable energy stocks.