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Antonio Costanzo, the former Head of Public Policy and Government Relations at Uber is taking a punt on CBD. Costanzo, now CEO at London-based EMMAC Life Sciences Ltd. told Bloomberg his company is attempting to negotiate the various EU member state market rules when it comes to the substance, through a very defined strategy.
That strategy is to try to build a “single market” for medicinal cannabis, including CBD, by investing in businesses in larger European countries that are liberalizing their way toward making it a mainstream product.
“Governments are opening up at a speed that it is hard to keep up with,” Costanzo said, and the company’s backers have been pleasantly surprised at interest in their offering.
EMMAC raised £17 million in two private financing rounds this year, giving it a valuation of about £77 million.
Costanzo is familiar with the challenge of getting access to markets through his time at Uber. In common with ride-sharing, regulations and attitudes toward medical cannabis differ by country. Presently, 31 countries in Europe have legalised medical cannabis, according to consultant Hanway Associates, but they’re all at different stages. Germany is already prescribing to patients, the U.K. has legalized but very few prescriptions have been written, and France is reviewing its regulation.
Once the company is established in the mentioned markets, it intends to build a business that controls cultivation, manufacturing, research and development, imports, distribution and branding of its products.
EMMAC wants to create regulated, licensed medicines that use active ingredients from CBD and other derivatives to participate in the booming wellness market via Blossom, a Swiss brand the firm has acquired that makes CBD oils, CBD balms and CBD teas.
It plans to make Portugal its cultivation and production hub and has bought a licensed firm to do that. It has also secured a license in Malta to make that its distribution base for moving product within and out of Europe.
EMMAC also owns the majority of Medalchemy, a pharma ingredients manufacturer in Spain which this week secured a medical cannabis import license. And it has made investments in the UK, Germany, Spain, France, Switzerland and Italy to position for those countries’ medical marijuana markets opening up.
Bloomberg reports that investor interest in Europe is growing, following great recent strides in the sector in North America, with investment banks positioning themselves to capitalise once public listings emerge.
For now, EMMAC is one of the leaders, with a valuation that’s more than double the size of London’s largest listed vehicle, Sativa Investments Plc.
UK-listed venture capital firm FastForward Innovations Ltd. was among investors taking part in EMMAC’s fundraising, pumping in £2 million and taking a 2.6 percent stake in EMMAC, according to a stock exchange filing.
FastForward had been on the lookout for an investment in the sector following its success with Nuuvera, the firm told the news agency. It added it anticipates there will be a “significant flow of capital” to the European medical cannabis sector in the next 12 months and it wanted to be one of the early investors through the door.
The European medical cannabis market alone will be worth EUR 58 billion a year by 2028, according to London-based cannabis industry market intelligence firm Prohibition Partners.
“We shouldn’t forget, this product was totally illegal for 70 years” and is now going through a similar process of acceptance and legalization that alcohol did after prohibition ended in the 1930s, Costanzo said. As regulation evolves, “we’ll see more and more investors coming into the space,” he said. In particular, if there is a positive change to regulation in a bigger potential market like the UK, Germany or France, that would attract “a lot more investors very quickly.”