GW Pharma takeover marks ‘turning point’ for cannabis market

The $7.2 billion takeover of medical cannabis giant GW Pharmaceuticals marks a ‘notable turning point’ for the cannabis market, with industry experts predicting more deals on the way. 

Europe’s first Exchange Traded Fund (ETF) focused on cannabis, says the decision by traditional pharma company JAZZ Pharmaceuticals to purchase GW Pharma is a notable turning point for the medical and wellness cannabis market.  

It expects to see further activity, with the sector still in the early phase of its growth to become a more mainstream consumer and healthcare category. 

The Medical Cannabis and Wellness fund UCITS ETF (CBDX), the first ETF to give access to the medical cannabis space in Europe, has now reached $56 million assets under management, making it the first to reach the $50 million level.

It provides access to companies active in the medical cannabis space that have been screened to ensure their legality for investment across Europe.

CBDX says foresight into the proliferation of the cannabis industry is becoming clearer, in part due to the recent tide of change from US elections. 

However, it believes that where the initial focus had been on US medical proliferation, the announcement of the $7.2 billion acquisition of GW Pharma could see attention quickly shift to the pharmaceutical cannabinoid side of this emerging theme. 

 “GW Pharma is the global leader in developing and commercialising a cannabis derived drug platform which has achieved regulatory approval in multiple jurisdictions in Europe and North America,” commented Nawan Butt, portfolio manager of The Medical Cannabis and Wellness UCITS ETF.

“Their current products, derived directly from the cannabis plant, address a broad range of diseases including the treatment of seizures associates with Lennox-Gastaut Syndrome (LGS), Dravet Syndrome and Tuberous Sclerosis Complex (TSC), all of which are rare diseases characterised by severe early onset epilepsy.

“In addition to their achievements with regulators, GW Pharma has a deep pipeline of cannabis-derived drugs as well as highly specialised manufacturing expertise combined with over two decades of pioneering cannabinoid science experience.

“The company’s first two products were rapidly scaled, achieving approximately US $510 million in annual sales within two years of launch.”

Butt continued:  “When GW Pharmaceuticals started, most global pharma companies were hesitant to work with cannabis, ignoring centuries of evidence there were some health benefits. As times are changing and attitudes adjusting, more and more companies are getting involved with the sector.  

“We are very proud to provide European investors with Europe’s first medical cannabis ETF, CBDX. It provides a legal and efficient way for investors to buy an index made of a representative group of medical cannabis companies in a single trade.”

The European listed Medical Cannabis ETF has just completed its first-year anniversary listing on Deutsche Boerse and London Stock Exchange in January 2020.