Freyherr International, a London-based company whose Slovenian originates, has today started trading in London growth at NEX Exchange Growth. The company has three young daughters in Slovenia who rely on success in the promising cannabis industry. They want to raise 5.5m euros in the stock market to expand production and development.
Freyherr has three subsidiaries in Slovenia (Freyherr, Freyherr Pharma and Patron) involved in the development and production of industrial hemp extracts. These are smaller companies that generated revenue of € 1.65 million last year and employ six people.
According to the website, the Group has the following options:
- in Slovenia, where they have a plant for the production of cannabis products for use in medical, cosmetic and nutritional supplements. According to one report, this year they began growing cannabis on 20 hectares of large leased land in Sekovle. Startup Freyherr is a member of the state-funded Strategic Development and Innovation (Srip) health-medical program last year, which aims to bring business together in the field;
- in northern Macedonia, where as of 2016, they have two hectares of cannabis growing area from which they produce high THC products for use in the pharmaceutical industry. It is worth mentioning that last year the company was also a member of an economic delegation with members of the government Mira Cerar travels to Macedonia.
The largest shareholders of the controlling London company are Slovenes Luke Fryer (28.5 percent), Tomaz Frehlich (27.7 percent) and Eva Tavkar Benkovic (14 percent). Fröhlich is the chief executive of a London-based company, and Freyer and Tavkar Benkovic are members of the board of directors. They are still in it Boris Yergen, 3% business owner and chairman Tony Burke,
There are millions each
The company is now seeking fresh capital on the London-based NEX stock exchange (listed on the website as "ambitious, fast-growing companies"). Trading started at 8 am.
The international Reuters news agency had already reported on Freyherr's intention in early July, saying it would start trading on July 30. Obviously, however, the date is then delayed by two weeks.
At its first public offering (IPO), the company offered 2.53 million ordinary shares to investors, representing about 10 percent of the company's equity. A total of € 5.5 million of fresh capital is expected to be raised.
The company promised to answer questions about its business plans this morning.
Freicher will be one of the first cannabis manufacturers to trade on the London Stock Exchange, Reuters reports. Another company with similar activity is the British investment fund Sativa, which directs money into investments in Canada. The company started listing on the stock market last spring, raising its first public offering of £ 1.1m, but today the stock is worth between £ 5-6 (around £ 6). Uncertainty about the regulation of the industry is reflected in the volatility of stocks (hence the fluctuation in value).
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What would you do with the money?
The money raised should be spent by the company as follows:
- € 1.5 million for the modernization of the Freyherr Pharme plant (including ventilation equipment and dryer) so that they can obtain a Good Manufacturing Practice Certificate (GMP certificate) within one year after the upgrade;
- EUR 1 million to modernize existing laboratories with anabidiol equipment;
- EUR 1.55 million for the purchase of new equipment to improve extraction and distillation processes and 99% purity of cannabinoids, respectively;
- the remaining one and a half million will be spent on setting up independent facilities in southern Europe, where the company is already believed to have a market interest in the business.
We asked the Ministry of Agriculture, which issues these cannabis production licenses in Slovenia, and we are still waiting for answers.
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Politics opens the door, doctors hold back
However, Freicher said in a note published on the London Stock Exchange in July that it seeks to exploit the huge market potential for the production of cannabis products for medical purposes.
In Europe, this is still in its infancy. But so far, medical cannabis use has been legalized by 22 members of the European Union (EU) – including Slovenia – and six are expected to do so this year. According to Prohibition Partners, the European market could grow to 123 billion euros by 2028, ie. for 10 years.
Cannabis has long been considered a very dangerous drug in our country and since 2014 it is possible to use medicinal products containing isolated or synthesized psychoactive THC. As of March 2015, cannabinoids may be prescribed by a doctor's white prescription. From March 2016, nailone (an analogue of THC synthesis) and cannabis extracts may also be used.
In Slovenia, however, doctors still need to refrain from prescribing medicines. It may be different in the segment of nutritional supplements and cosmetics, where cannabis products are already well established in the market.
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