Kanabo Research Ltd, a maker of vaporisation and inhalation technology for cannabis, is poised to become the first cannabis company to list on the London Stock Exchange when it performs an initial public offering (IPO) on Tuesday.
The Israeli company is set to list on the market through a reverse takeover of Spinnaker Opportunities Plc (LON:SOP) after the transaction was approved by shareholders last week. The listing also follows a move by the Financial Conduct Authority (FCA) last year to allow medical, but not recreational, cannabis companies to list on the London market after medicinal use of the drug was legalised in the UK in 2018.
In an IPO prospectus published on January 29, Kanabo said it has raised £6mln through the issue of around 92.3mln shares at a price of 6.5p each, while Spinnaker plans to change its name to Kanabo Group Plc once the reverse takeover is completed.
The company is also expected to list on the LSE will a market value of around £23.2mln, while the £6mln raised will be used to fund its growth strategy going forward.
"I believe the UK and Europe are ready to embrace the benefits of medicinal cannabis and the overwhelming support and interest from investors has proved this. The roadshow was oversubscribed and this will help the company grow and create value faster than previously expected", Kanabo chief executive Avihu Tamir said in the company’s prospectus on January 29.
While it may be the first cannabis firm to IPO on the LSE, Kanabo will not be the only company in the space looking to draw the eye of London’s investors.
Other companies, such as dual-listed phytocannabinoid derived medicines group MGC Pharmaceuticals (LON:MXC) and Aquis-listed CBD products firm Sativa Wellness Group Inc (LON:SWEL), are already looking to tap surging investor interest in the global legal cannabis market, which is expected to be worth around US$65bn by 2027 compared to around US$17.5bn at the end of 2020.