Eco Equity, which expects its first cannabis export crop in the new year, plans to launch a retail brand Eco710 in the United Kingdom.
The Zimbabwe license holder is forecasting an initial annual production of around 15 470 kg of EU-GMP flower and 1,591 kg of EU-GMP oil for 2021. The fresh bud and oils are destined for European wholesalers. When fully operational, this is expected to generate annual revenues of around US$34-35 million based on current prices and off-take agreements. Once export begins, Eco Equity will be one of only seven producers with an EU export licence under GMP standards.
Time to move into the UK retail space
Eco Equity founder Jon-Paul Doran says “We’ve firmly been concentrating on the cultivation side of things and medicinal applications and markets. But for us to move onto the next level in terms of CBD, it was essential for us to move into the retail space so we will be launching our retail brand.”
Eco-Equity’s Doran: CBD brand to be launched in UK
While the EU may be a good starting point for Eco Equity exports, the UK post-Brexit may offer exciting, new opportunities and it would appear that Doran’s timing may be spot on.
The U.K.’s Foods Standards Agency (FSA) recently announced that it will consider novel food applications for CBD products from January 2021 onward, consistent with its September announcement that the FSA did not consider CBD to be a narcotic – months before the recent landmark EU ruling relating to France. Along with the U.K.’s Home Office accepting that cannabis in the form of CBD should not be a controlled drug, other African exporters should look more closely at the UK’s prospects as a cannabis market.
Doran says “medicinal cannabis has proved itself to be one of the more resilient industries during the coronavirus pandemic”, and wants to open up opportunities for other investors. The former Citibank financier has launched Guernsey-domiciled JPD Capital as the investment vehicle that funds Eco Equity and is on the look-out for value elsewhere.
Doran looking to take his empire public
The company is examining a possible dual flotation in the UK and Canada, says Doran: “We have got different options, we may look at dual-listing. For now, we are talking to corporate advisers about the best strategy and we will deliver on what’s best for our investors, be that the NEX market [now the Aquis Stock Exchange], AIM or in Canada on the TSX.”
In June, the firm announced a £10.2 million convertible loan note offer to fund the development of its Zimbabwe medicinal cannabis cultivation project, with several off-take agreements having been secured.
In July, analysts at accounting and consultancy firm Baker Tilly valued the company at US$210 milion following an assessment of its operations.
The firm said Baker Tilly had met with the executive team of its cultivation project in Zimbabwe and were “very impressed” with its business model and operational progress.
Using a weighted valuation method, Eco Equity said the valuation from the consultancy’s report meant its shares were currently worth 56p each compared to the investment price of 10p each in the firm’s first round fundraising.
Zim facilities ready for 2021 exports
Construction is well underway at the company’s property in Zimbabwe, with the essential water supply and a mix of solar and generator power secured.
Eco Equity’s Zim facilities under construction earlier this year
A research and development facility is nearing completion and the ground had been readied for the poly-tunnels and state of the art glass greenhouse.
Cultivation in Zimbabwe was due to start in the second quarter of 2020, but coronavirus restrictions delayed that until the end of the year.
“We’ve got a tremendous team in terms of cultivation and one thing we want be renowned for is quality and consistency,” he said. “We are also working to ensure the price per gramme stays low, as that it really is our competitive advantage.”
The company said it in August 2020 it would will refocus its investments away from its Antigua cannabis business. It said the Caribbean tourism and dispensary sector had been affected the disruption of the tourism and cruise ship industry caused by the coronavirus pandemic.