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Investing in cannabis

It is huge. This is not some tie-dyed hippies in a shed somewhere. This is serious business now

on whether an investment in something is legal. For banks, it’s different because they have an ongoing relationship sending money back and forth around the world, with each transaction potentially raising its own issues.” However, this is an opportunity that can’t be ignored, he believes. Companies such as Coca-Cola, AB InBev (owner of Budweiser) and Marlboro parent Altria are all dipping their toe into cannabis-related products. “It is huge,” says Atkinson. “This is not some tie-dyed hippies in a shed somewhere. This is serious business now.”

SAFEST OPTION CBD products marketed as nutritional supplements are legally the most straightforward segment of the cannabis sector to get involved in. Guernsey-based Healthspan, which markets vitamins and other supplements, started selling capsules of CBD oil in March 2018 and has since expanded into drops. The products are listed in Boots and Superdrug stores, and Rollo de Sausmarez, the firm’s Director of New Product Marketing and Development, says: “This has grown to be a really big part of our

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business; it’s the fastest growing area that we’ve ever had.” Healthspan’s CBD products are manufactured to the company’s own specification in Europe from European Union-listed varieties of industrial hemp, although de Sausmarez says he would like to source it from the Channel Islands if the right quality product became available. The ‘big bucks’ will probably be in medicinal cannabis, he believes, partly because, in the case of supplements, specific health claims cannot be made. Nevertheless, CBD supplements are benefiting from huge word-of-mouth endorsement. A recent study of CBD users, cited in the journal Cannabis and Cannabinoid Research, showed that they typically take the supplements to help with joint pain, chronic pain, sleep disorders, mood and anxiousness and stress. Healthspan’s customers are largely aged over 65, but when the company asked them if they would be happy for it to offer CBD products, only one out of 300 was against it. “I was surprised,” says de Sausmarez. The low level of regulation, however, means that CBD is a market segment that already has a mixed reputation, with some studies showing that many products on the market contain little or no cannabis oil. “We test every batch and publish the results on our website,” says de Sausmarez. This transparency offers a clue to where

the Channel Islands could have a serious advantage in the overall cannabis sector. For anyone looking to set up a corporate entity or an investment fund investing in the sector, the islands’ expertise in dealing with regulation and strong imperative to stay on the right side of the law could prove a significant advantage.

REGULATORY ADVANTAGE Atkinson says: “In all of the offshore jurisdictions, we are looking to comply with international obligations around issues such as money laundering and terrorist financing. Here in Guernsey, because we have such a strong financial services industry, there is a lot of expertise around these obligations in a properly regulated space. People are very alive to these issues and to doing things properly.” Appleby’s Field agrees. “This is one of those jurisdictions where you have that badge of respectability and validity and where there are proper checks. So, to the extent that you’re saying: ‘We want to invest in or run a CBD business and we want it to be open and transparent and we want people to know that we’re doing the right thing, and this is not seen as some kind of shady drug-running operation’, this would be a good place to do it.” For Beauvoir Group’s Pleasant, it’s an opportunity that can’t be ignored. “The Channel Islands need to diversify and develop new markets. We have always been progressive and looked at providing solutions, and if you put together the fact that Guernsey has already granted licences for growing cannabis with the fact that we are a world-class financial centre, it becomes a natural jurisdiction for somebody wanting to put an entity in place.” n

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Profile for BL Magazine

BL Magazine Issue 64 September/October 2019  

Why is cannabis making waves in the investment community? How can businesses build good relationships with journalists? And why should compa...

BL Magazine Issue 64 September/October 2019  

Why is cannabis making waves in the investment community? How can businesses build good relationships with journalists? And why should compa...