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Canxchange benchmark report reveals outlook of European hemp market

The Canxchange Farmers Sentiment Index (CFSI) shows a fairly optimistic outlook from European hemp farmers.

Stephanie Price

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Canxchange benchmark report reveals outlook of European hemp market

The second edition of the Canxchange quarterly benchmark report has revealed a positive outlook for European hemp farmers.

Surveying over 100 hemp farms and co-operatives across Europe, the Canxchange Farmers Sentiment Index (CFSI) shows a fairly optimistic outlook from European hemp farmers overall, with an index score of 111.7. 

The report highlights a number of different factors contributing to the sentiment, including the “slowdown of the COVID-19 pandemic” and “better visibility due to vaccine programmes that have been implemented across the globe” – giving farmers the confidence to invest in production machinery and materials.

Small farmers less confident

Farms over 1000 hectares showed a CFSI of 116.8, between ‘fairly optimistic’ and ‘highly optimistic’, whereas farms at less than 500 hectares showed a CFSI of 106.6 between ‘fairly optimistic’ and ‘neither pessimistic or optimistic’.

The difference in sentiment is possibly due to a number of variables, according to the report, including smaller production units struggling with access to distribution networks, price competition, and that smaller farms were hit harder by the COVID-19 pandemic.

Despite this, the report states that the vast majority of hemp producers are expecting to sell more than 80% of their production this year, with 60% of survey participants having already pre-sold the majority of production for the year, and negotiations having already begun for the 2022 harvesting campaign.

Overseas competition

Prices for CBD whole flowers, biomass and oil have remained stable, however, CBD, CBN and CBC isolate prices from the US have been blowing “European competition out the water” at €400-500/kg, compared to the cheapest European isolates which have been closer to €1000/kg. The report goes on to highlight that the last few months have seen European isolate prices stabilise at €400-500, but that US products that are beginning to appear on the European market continue to put pressure on producers. 

The report states: “The minor cannabinoid space is gaining more and more traction as CBD has become a very competitive market and experienced CBD players are looking to diversify into minor cannabinoids which are picking up in popularity. CBN and CBC prices remain stable as the supply and demand curve looks stable. Some US products are starting to appear in Europe putting pressure for prices on European producers.”

Canxchange says that a number of other indicators will be published in the coming months. To read the full report please visit https://www.canxchange.eu/contact-10. 

Markets and industry

Tilray sees net revenue increase to $513m from last year

Tilray has a net income of $33.6m during the fourth quarter compared to net loss of $84.3m in the prior year quarter.

Stephanie Price

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Tilray sees net revenue increase to $513m from last year

Cannabis leader Tilray has seen its net revenue increase to 27 per cent, totalling $513m compared to last year.

Global cannabis lifestyle and consumer packaged good company Tilray, which is a leading EU GMP-certified Medical Cannabis LP in Europe, has reported its financial results for the full fiscal year, revealing that it had net income of $33.6m during the fourth quarter compared to net loss of $84.3m in the prior year quarter.

Net revenue increased 25 per cent to $142.2m during the fourth quarter from $113.5m in the prior year quarter.

Cannabis revenue

The Company says the increase was driven by 36per cent growth in net cannabis revenue to $53.7m, which included four weeks of contribution from legacy-Tilray, a 10 per cent decline in distribution revenue, net beverage alcohol revenue of $15.9m following its SweetWater acquisition on November 25, 2020, and wellness revenue of $5.8m from its Manitoba Harvest.

Tilray’s Chairman and Chief Executive Officer, Irwin Simon, said: “Early results from the new Tilray affirm that, while the global cannabis market remains in its early stages, our vision, scale, access to resources and operational excellence position us optimally to capitalise on the opportunity. 

“In a very short period of time since our business combination was finalised, we transformed and strengthened Tilray, delivered solid results amid continued COVID-19 lockdowns and restrictions and achieved $35m in synergies to date – well on our way to delivering $80m in cost savings over the next 16 months.

“These are early achievements but they provide the roadmap for our strategy and priorities moving forward. Tilray is now truly leading the global cannabis industry with low cost of production, leading brands, a well-developed distribution network, and unique partnerships that we believe will drive sustainable shareholder value in the quarters to come. 

“We look forward to accelerating and refining our business-level strategies and roadmaps and to ensuring unmistakable, measurable progress as we build the leading consumer-packaged goods business in the cannabis industry.”

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Markets and industry

Sales surge puts Love Hemp on road to global expansion 

Love Hemp expects further growth this year amid its launch on Amazon in Q1 2022, a new subscription model and overseas expansion in the US, Europe and Japan. 

Stephanie Price

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Sales surge puts Love Hemp on road to global expansion 

UK CBD brand Love Hemp expects to at least double annual revenues to £8.6m+ this financial year after a bumper 12 months of online and High Street sales.

Love Hemp plc saw sales surge 60 per cent to £4.31m in 2020/21 driven, in part, by wider consumer recognition of its brand, maturing of online platforms and an increased presence in retail outlets.

It now expects further strong growth this year amid its launch on Amazon in Q1 2022, a new subscription model and overseas expansion in the US, Europe and Japan.

Orders from major UK retailers

Units sold in 2020/21 increased by 244 per cent year-on-year to 188,865, with third party retail representing 41 per cent of total revenue.

In October 2020, the firm secured large orders from major UK retailers, Boots and Holland & Barrett; which saw the company gaining a stronger revenue of £2.38m in H1 2021, compared to £1.93m in H2.

Its products are now sold in 198 Boots stores and 838 Holland & Barrett outlets across the UK, with distributors including Ocado, Alliance Healthcare Distribution Ltd and CLF Distribution, totalling more than 2,000 stores.

Sales from the company’s own online channels, lovehemp.com and cbdoilsuk.com, grew by 17 per cent on the previous year, and represented 59 per cent of total revenue for the period.

The company expects these revenue streams to evolve further as sales via online channel partners such as Amazon, which are due to come online in the first quarter of 2022, and from its online channels in line with its move to a subscription based model.

A further growth contributor is its high profile marketing campaigns in partnership with Anthony Joshua.

CEO Tony Calamita said: “The record revenue we have seen in the financial year 2021 is an endorsement of the growing strength and visibility of Love Hemp, which has grown in line with the burgeoning consumer interest in high-quality CBD products in the UK.

“This consumer demand and trust in our products is increasingly being reflected in major high-street retailers seeking to stock Love Hemp products to enrich their wellness offerings, where we have seen our shelf presence double in FY21.

“During the year, we saw a 236 per cent increase in third party retail sales and a 56 per cent increase in units sold through our high street stockists, including Boots and Holland & Barrett.

“Our multi-channel approach to sales resulted in increased online sales and consumer accounts. Our online distribution network and the revenue streams emanating from it are expected to increase significantly in FY22 as we launch new online channel partners, including Amazon.”

Global growth

The company’s revenue continues to be UK centric, however, this is expected to change as it pursues its large-scale international growth strategy.

During the period, the company has raised over £10m in equity which will be invested in targeting new geographies including the US, Europe and Japan; as well as brand expansion via partnerships with the aforementioned Anthony Joshua and the Ultimate Fighting Championship.

Calamita added: “Love Hemp is well positioned to benefit from the growing consumer appetite for CBD wellness products in the UK, and we look forward to launching our first major marketing campaign ahead of Christmas in partnership with Anthony Joshua. In addition to growth in the UK market, we have spent the year preparing for our launch into new geographies, including the US.

“The US CBD market is considerably larger than the UK and will therefore be transformational for Love Hemp. Our growth strategy puts us on a trajectory to at least double our revenue in FY22.”

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Markets and industry

AssetCo acquires 63% stake in Rize ETF for £16.5m

The 63% acquisition will see a further investment of £5.25m to help fund the growth of the business

Stephanie Price

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AssetCo acquires 63% stake in Rize ETF for £16.5m

AssetCo has announced it will acquire a 63% stake in Europe’s first specialist thematic ETF, Rize ETF, for £16.5m.

Expecting to close on 27 July, 2021, the 63% AssetCo acquisition of Rize ETF, which has launched four thematic ETFs including Medical Cannabis and Life Sciences, will see a further investment of £5.25m to help fund the growth of the business.

Gordon Neilly, an adviser to AssetCo, and Gary Collins, Head of Distribution at AssetCo, will join the Rize ETF board.

A new approach to asset management

As well as medical cannabis, Rize ETF, which currently has $450m of assets under management and was recently named winner of “Best New ETF Entrant” in the ETF Express Awards 2021, specialises in Cybersecurity and Data Privacy, Educational Tech and Digital Learning, and Sustainable Future of Food. It is also anticipating the launch of four new thematic ETFs for 2021, including the launch of Environmental Impact 100 ETF later this month.

AssetCo will fund the £16.5m consideration from an equity financing by way of an accelerated bookbuild for approximately £25m.

Peter McKellar, Deputy Chairman and CEO of AssetCo, commented: “The team at Rize has built an impressive thematic ETF platform, based on an incredibly exciting ethos. It provides investors access to products that enable them to participate in new and relatable themes and benefit from strong growth led by secular trends.

The Rize approach to product development echoes one of the fundamental principles on which AssetCo’s strategy is based: that a new approach to asset management, unbridled by legacy constraints and ways of doing things, will drive significant growth, as technology led manufacturing and distribution of investment products tap into the new, emerging trends in the way the next generation of investors choose to allocate their capital.

Our strategy is to position AssetCo to take advantage of the structural shifts taking place within the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisers. Rize has the team, pedigree and expertise to grow significantly and to continue to deliver product innovation for investors, building a world class thematic ETF business in the process. 

“We are looking forward to working with the Rize ETF team in building the business and delivering value to investors and AssetCo’s shareholders.”

Management and employees will own an effective 37% equity interest in Rize ETF following the acquisition, of which 5% is subject to certain near-term performance conditions.

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