Cannabis helping to keep the finance sector busy

Wayne Atkinson, a partner at law firm Collas Crill, said global businesses were increasingly getting involved in cannabis products, from CBD to recreational and medicinal uses, in jurisdictions around the world that allowed such uses.

Collas Crill has advised on a number of deals involving Guernsey structures in support of legalised cannabis transactions, most recently the establishment of a holding company locally for a major player to help drive growth in Europe.

‘We have to keep evolving and finding things that are going to keep our finance sector busy and this is one of those things. It’s a potential area of growth for our finance sector. It’s a diversification as well,’ said Advocate Atkinson.

‘In terms of the scale of the sector, some of the biggest names in global industry are looking at it right now because it’s opening up. This is not people in tie-dye T-shirts with a few weak plants out back. This is big business. It’s proper industry. It’s very well regulated, they’re doing things to a very specific standard, with very scientific methods of growing. They’re doing that with a view to making really chunky profits.’

Guernsey was also seen as leading the way in being able to support growth in the sector, through the use of structures such as holding companies, thanks to the approach taken locally by the authorities.

Local firms can engage in the legalised global cannabis market, said the legal expert, as long as use of the drug is permitted in the jurisdictions relating to that particular piece of work.

‘By the law officers confirming their approach to this, this has given renewed confidence to the industry. The model works. I think right now we’re ahead of the game and I would expect more to come as a result of that,’ added Advocate Atkinson. ‘There are a number of different variations of this that are coming through the Guernsey financial services sector. But the ability to show that you’re open to this is going to attract business significantly.’

Guernsey company for Euro growth

A MAJOR PLAYER in the medicinal cannabis industry has established a holding company in Guernsey in a push for European growth.

US firm Curaleaf has set up Curaleaf International Holdings in Guernsey after buying Emmac Life Sciences, one of Europe’s largest medicinal cannabis companies.

The Guernsey-based company will hold the Emmac investment and further Curaleaf’s expansion.

Curaleaf International already has an operational presence in European Union countries enacting new medical cannabis access schemes.

The company intends to substantially increase its cultivation capacity in 2021 to facilitate anticipated growth through increased access to the use of cannabis across major European and export markets.

Boris Jordan, executive chairman of Curaleaf, said the acquisition of Emmac and formation of the new Curaleaf International business marked ‘a transformational launching point’ for entrance into the European cannabis market.

‘Building on our market leading position in the US, this transaction establishes Curaleaf as the global pure-play [a company that focuses solely on a particular

product or activity] cannabis market leader by revenue and geographic reach,’ he added.

To accelerate the expansion of Curaleaf International, Curaleaf also announced it had secured a $130m. investment from a single strategic institutional investor in exchange for a 31.5% equity stake in the international business.

The investment will be used to help fund the Emmac acquisition, with $80m. being used to fund Curaleaf’s International’s current capital expenditures plan through 2022 as well as a pipeline of potential acquisitions.

Mr Jordan added: ‘With our single strategic institutional investor, we have set a strong foundation for Curaleaf International’s future growth trajectory.’

. Collas Crill advised Curaleaf on its acquisition of Emmac and on the establishment in Guernsey of Curaleaf International Holdings.

Paul Wilkes, partner at the law firm, said: ‘It was a pleasure to work with the Curaleaf and broader transaction team to get this transaction over the line, notwithstanding a challenging timeline and some complex elements.’

He highlighted the key role of senior associate Gareth Morgan in coordination and leadership as the deal neared the finish line.