SEED Innovations Ltd (AIM:SEED, OTC:FFRIF) chair Ian Burns, in the company’s results statement, told investors that the company is still confident of the opportunity cannabis companies present, whilst acknowledging macro-economic and market sentiments towards some listed cannabis companies.
“Despite an initial flurry of stock market activity in London immediately following regulatory approvals to list cannabis companies, sentiment towards these companies has not remained favourable with a number of those that came to market failing to deliver the expectations of early investors.
“Coupled with the very recent geopolitical turmoil impacting general stock market confidence, we have seen further downward pressure on our net asset value.
“With all that said however, the board is still confident of the opportunity cannabis companies present to investors; with two verticals, the first prescription medicines, where the core of our current cannabis investments lie, and the second over-the-counter CBD products, there are multiple revenue streams available to investors.”
He added: “With a number of investments in medical cannabis companies within SEED's portfolio, including Eurox and Little Green Pharma, we are acutely aware of the growing European medical cannabis market and the month-on-month growth of prescriptions.
“Thematic investments regularly see peaks and troughs, and cannabis investing is not different.
“Whilst there is a clear disconnect between these growing prescription numbers and stock market demand for cannabis companies operating in these markets in recent months, we firmly believe that SEED is well positioned to benefit over time, particularly with the board and management's expertise in the sector seeking out the right investments.”
Commenting specifically on companies it is invested in, the SEED chair said: “Many of our existing portfolio companies saw significant operational progress within the period under review, and SEED added three new health and wellness companies to its portfolio, plus one additional company following the restructuring of a legacy investment.
“Alongside these new investments, we have continued to support our existing portfolio companies, and collectively expand and balance out the liquidity of our portfolio.”
In terms of financial results, the investment today reported that net asset value at the end of its reporting period, March 31 2022, was marked at £20.46mln which equated to around 9.62p per share (today’s market price in London: 4.73p).