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London firm offers taste of cannabis fund to investors

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Fund: Medicinal cannabis products on display in a Canadian dispensary

Fund: Medicinal cannabis products on display in a Canadian dispensary

Bloomberg

Fund: Medicinal cannabis products on display in a Canadian dispensary

A London-based firm is offering investors a slice of the cannabis market - but interested locals may have to wait for it to be passed along.

JPD Capital this week launched a fund that backs offshore growers of medicinal cannabis, targeting assets of £100m (€90.2m) by the end of the year.

It's so far raised about £35m from mainly overseas investors, because a catch-all piece of UK legislation means any British participants could be breaching the law.

"We haven't got time to wait for the licensing process to come into the UK," JPD founder and chief executive officer Jon-Paul Doran said in an interview in London. "For now, I believe it's a closed market."

JPD hopes to draw global investors who'd rather back private firms instead of the likes of US and Canadian cannabis stocks that underperformed last year. Cannabis-related listings in the UK have been rare, and small in size, meaning banks don't stand to gain a lot by taking on the risk. Startups in the sector are raising money privately instead.

"There is a lot of volatility, a lot of companies highly inflated," said Mr Doran. "We want to start to generate revenue and then look at a stock market listing."

JPD owns a company in Zimbabwe - where Mr Doran was born - that has acquired one of five licenses in the country to cultivate and export cannabis globally, according to its website.

While recreational use of cannabis remains unlawful in the UK, the drug was legalized for medical prescription in 2018.

Commenting at the fund's launch in London on Wednesday, Conservative member of parliament Crispin Blunt said he believed the UK government was open to an evidence-based change in cannabis legalisation.

Bloomberg

Bloomberg