Greencare Capital PLC (AQSE:GRE) said it sees "exciting investment opportunities" in regulated cannabis and CBD markets, with one of its two investments in the pre-IPO fundraising phase.
In a statement alongside results for the first half of 2022, the investment company's chairman Dominic White noted that there has been some volatility in the cannabis sector over recent months, but he and the rest of the board believe "there continue to be investment opportunities within the cannabis sector as well as in the wider wellness industries and the fast-growing production, distribution, and other associated business sectors".
In the previous year, Greencare made two investments: a £100,000 investment in Clearly Supplements, a UK based company offering CBD products direct to customers, and an equity investment of £100,000 in Voyager Life PLC, following its own Aquis IPO in 2021.
With the Clearly investment via a convertible loan note with a 5% coupon, a 12-month duration and expected to convert to equity at the time of a public listing at a 30% discount, White said the company was in talks with Clearly's management regarding the conversion after the stock market application was deemed eligible by the Financial Conduct Authority.
Voyager meanwhile has grown since the time of the investment, as its own recent update detailing revenue in the past six months increased 88% compared with the preceding period as it expands its range of formulated CBD and hemp products.
White, who is executive chairman of Eight Capital Partners and was appointed to the Greencare board as non-executive chairman in April, said Greencare has "looked closely at a number of investment and acquisition opportunities" during the half-year, in particular in South Africa and North Macedonia, where due diligence and negotiation processes were "almost completed" before it was decided not to complete.
The resulting higher costs compared to the previous financial period resulted in a higher loss before tax of £258,000 compared to £102,000 a year ago.
The value of its financial assets increased to £142,000 from £100,000, while total assets fell to £914,000 from £1.4mln as cash levels dropped to £679,000 from £1.15mln.
White said the company continues to review other investment opportunities in the medicinal cannabis and wellness sectors.
"The market outlook for medicinal cannabis still remains positive," he said. "The directors are of the opinion that there are exciting investment opportunities in those market sectors which the company is focused upon.
"The regulatory landscape continues to evolve, and the company is well placed to deploy funds to take advantage of these changes. The board is constantly assessing potential transactions in cannabis, health, wellness and plant-based medicines and looks forward to updating the market further in the near future."