LONDON, – British-Canadian pharmaceutical company Eco Equity is developing a medicinal cannabis cultivation business in Zimbabwe, with a vertically integrated operation in Antigua.
The company, which is examining a possible dual flotation in the UK and Canada, holds a licence in Zimbabwe to export into the European Union.
Refined oil and botanical flower, both certified under EU good manufacturing practice (GMP), will both be exported to wholesalers to fulfil existing off-take agreements in the EU regions, as per the licence.
Zimbabwe-born chief executive John-Paul Doran, formerly a Citigroup financier, founded the company after moving out of the City into the cannabis industry.
Once construction of the indoor facility (R&D growing facility) poly-tunnels and 20,800 square metre glass greenhouse is complete, the facility is designed to produce 1,300kg per year of raw cannabis flower and 1,100kg of oil, both for export to the UK and Europe.
When fully operational, this is expected to generate annual revenues of around US$34-35mln based on current prices and off-take agreements.
Antigua is a different model, with a vertically integrated model from cultivation to retail, with the latter based on the US model of wellness ‘dispensaries’ for the domestic consumer and an on-premises lounge to tap into the tourism market.
The Antigua business also holds an export licence, with the medium-term target being other islands in the Caribbean and potentially the US.
In the UK, Guernsey-domiciled JPD Capital has been launched as the investment vehicle that funds Eco Equity and potentially other investments in the medicinal cannabis industry. This is the primary vehicle for investors.
How is it doing?
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.
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.
Doran, whose brother Tommy is the man on the ground supervising operations in Zimbabwe, said several off-take agreements have been secured.
The target to ship Eco Equity’s first oil and flower by the end of the third quarter is very much dependent on when lockdown measures are eased in Zimbabwe.
A retail brand, Eco710, is intended for launch in the UK in coming months.
What the boss says, chief executive J-P Doran
“We’ve got a tremendous team in terms of cultivation and one thing we want be renowned for is quality and consistency,” said Doran in May.
“We are also working to ensure the price per gramme stays low, as that it really is our competitive advantage.”
“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.”
On the potential for an IPO, he said: “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.”