London-based Eco Equity recently completed a £18.3 million fundraise that will provide the necessary capital to realise the companies ambition of becoming one of the leading suppliers of Medicinal Cannabis in Europe.
Eco Equity, owned by private equity fund vehicle JPD Capital, is currently in the process of rapidly scaling its operation and infrastructure to achieve fully operational status. The company is expected to generate US$57.7 million (£43.3m) in gross revenues when fully operational, with EBT of nearly US$33.8 million (£25.4m).
The company owns operational facilities in Zimbabwe, including a state-of-the-art greenhouse cultivation facility, having secured one of five licences to cultivate cannabis for medicinal purposes in Zimbabwe in late 2018.
Jon-Paul Doran, CEO of JPD Capital, said: “We want to position ourselves as one of the leading pharmaceutical producers of medicinal cannabis. As a low-cost producer we believe we can bring the produce into the UK through the right channels at a price point which makes it accessible to people who desperately need it.”
As part of its Q3 and Q4 2020 activities, which require the company to transition from fund raising activity into cultivation and supply for its wholesale customers. Eco Equity has negotiated significant off-take contracts, securing the sale of all produce and ensuring Eco Equity is cash flow positive in 2021, this will generate significant and scalable revenue as the company moves towards an IPO next year.
The third quarter of 2020 was also a period of strategic collaborations for both Eco Equity and JPD Capital. Eco Equity started a Research and Development collaboration with the Harare Institute of Technology (HIT) a Zimbabwe-based scientific institute dedicated to “technopreneurial” leadership.
“We are thrilled to have been able to close our second round of funding for London based Eco Equity and see our first portfolio entity become fully funded. Since launching over two years ago, our flagship operation with cultivation in Zimbabwe has grown from strength to strength and we are pleased to be able to reward our investors.” said Doran.
Eco Equity’s Managing Director Tommy Doran in Zimbabwe said: “The coronavirus pandemic has caused issues for many organisations this year, and it is always particularly tough for new industries to avoid collapse. The medicinal cannabis industry has continued to show resilience in the face of adversity, and with the company set to begin cultivation at the beginning of 2021, we are looking forward to the year ahead, rather than looking back on what has been a difficult year across the globe.”
JPD Capital is also expanding across Europe, through the creation of medicinal cannabis company Íbero Botanica, a joint venture between Verdex Group and JPD Capital, with facilities in Almeria, Spain.
Verdex Group is an EU licensed Spanish company for research, cultivation and production of cannabis for medicinal and therapeutic pharmaceutical medicine. Verdex Group owns and operates two greenhouse cultivation sites and over 100 hectares of outdoor sites across the Andalucía region in the south of Spain.
Verdex, says Doran, is the primary operator in the region. “We have been working really closely with the business for some time. There is a team on the ground ready to start in earnest. We provide the funding for Verdex to increase capacity and meet demand, utilising their operational capability, and we get the opportunity to generate revenue. This is a marriage made in heaven.”
JPD Capital believes the European market for medicinal cannabis is likely to be worth €39.1 billion by 2024, and the African market worth $2.6 billion by the end of the same period, putting the company, with its Spanish and Zimbabwean operations, in an enviable position.
JPD Capital has gone through a rapid period of acquisition and expansion over the past two years. Within the Company’s portfolio is Regent Pharmaceuticals, a distribution company with a sales network across the UK and Europe to both retail pharmacies and clinics, along with an on-line clinic for patients.
Another acquisition was Tetra Global, a medicinal cannabis research and development company specialising in selective breeding programmes in pursuit of proprietary genetics and hybrid strains.
A fifth business is Eresos, JPD Capital’s e-commerce brand.
Source | Eco Equity, Wealth & Finance News