Hanway Co-founder Describes Europe’s Climate for Cannabis Investment
By Oliver Bennett, Special Contributor to New Frontier Data
Hanway Associates is a London-based, strategic consultancy specialising in cannabis research, market entry, corporate advisory services, commercial diligence, and M&A strategy. Started in 2017, the company now features a dozen members of its team, working with companies ranging from consumer start-ups to industry giant GW Pharmaceuticals.
One of its co-founders, Alistair Moore, recently spoke about the company’s origins and the future for Europe’s legal cannabis markets and industry
“My first foray into the cannabis space was at the end of 2014,” Moore explained. “I was working in the creative industries and met Paul Birch, a tech entrepreneur and philanthropist who funded drug policy organisations, but was frustrated with the lack of progress. He founded a single-issue party called Cannabis is Safer than Alcohol (CISTA) to fight the UK’s 2015 General Election, trying to get other parties to be pro-cannabis in their manifestos.”
Birch invited Moore to join Volteface, a new organization intending to meld a modern media platform with a traditional political think-tank working on drug policy reform initiatives.
“Cannabis campaign messaging at this time was unclear, and people weren’t connecting with it,” Moore explained, “as it was focussed on UN-level conversations and North American-inspired slogans. It wasn’t making effective arguments for why British policymakers should legalise cannabis.”
For the first few years, Volteface (from the French term for “about-face”) busied itself by taking journalists and policymakers to countries in the midst of adapting progressive drug policies, including the United States and Canada. By 2017, Moore (and fellow co-founders George McBride and Dr Henry Fisher) started Hanway Associates, which itself soon begat other companies like Cannabis Europa, a leadership platform and event series.
A watershed of sorts took place in 2019, with a two-day event at London’s Southbank Centre with Sir Norman Lamb and other well-known British politicians.
“London and the U.K. have become the predominant places to raise capital in the European cannabis market for start-ups and high-net-worth investments,” he explained, “and the events of 2020-‘21 have tapped into it. Previously, a few North American venture capital firms had successes in Europe, and there was early public market activity in Scandinavia. But from 2017 to 2020 there was huge demand in Europe, but little outlet. Then it began to change with the opening of the London Stock Exchange to cannabis businesses.”
Moore noted that “Brexit has definitely influenced the city and government to make the U.K. an attractive place for business. There’s a real urgency to make sure that the world knows that the U.K. is open for business, and it’s coming out in interesting ways.”
He cited a £200 million commitment to innovation in the U.K. Life Sciences Vision, and a recent report (by Sir Iain Duncan Smith with Member of Parliament George Freeman) for the Task Force on Innovation, Growth and Regulatory Reform, which looks at how the U.K. could encourage categories including hemp and nutraceutical cannabis.
“A couple of companies here in the U.K. are plotting a new course for Europe, and positioning to take advantage of this,” Moore said. “An interesting one is Oxford Cannabinoid Technologies, founded by Neil Mahapatra. It has received lots of institutional capital and partners with Oxford University to develop drugs for specific indications. Grow Group is a good example of a company that has embraced pharmaceutical rigour, but acknowledges that medical cannabis is different to traditional pharmaceutical healthcare. It realises that cannabis is very patient-centric and is trying to rebuild the healthcare system around that concept.”
While noting that grey areas remain (including financial regulations like the Proceeds of Crime Act), Moore writes them off as “all part of the evolution of the cannabis industry from ‘early stage’ business backed by high-net-worth investors and angels, to something that’s ‘later stage’. Once we hit the next milestone for revenue and valuation, we’ll see a lot more institutional capital come in.”
Though Moore offers no prediction about near-term prospects for legalisation in the U.K., he said that “if you look at how reform timelines have happened globally, the length of time between medical cannabis acceptance and wider reform is short, and there’s a positive direction of travel. One of the arguments is that conservatives have a history of taking progressive causes that are in the heartland of the left. So, I would not be surprised if that happens within this political term, and likely within 10 years.”
For the time being, Moore said that Hanway Associates is continuing to work on drug policy-related problems, and recently incubated Clerkenwell Health, a clinical research company working to provide access to and data on psychedelic medicines.
“Investors in the city are getting excited,” Moore said. “The path has been led by investors in CBD companies, who saw their mothers, brothers, and sisters buying the product on the High Street, and it’s moving at a different speed with medical cannabis.” He said that while a lot of early stigma prevented medical cannabis’ progress, patient access is now improving, and there are several serious groups looking at how public-private partnerships can solve the type of blockage seen within the U.K.’s National Health Service (NHS), and “aiming to improve access and reduce costs in either the existing system or a future public system.”
As for other European countries, Moore points to Germany and Scandinavia for further optimism.
“The German market is really interesting. There’s a real momentum towards a better system, with more access to patients. But they don’t really have a strong public marketplace, which has left a gap to fill. I suspect we might start to see more German companies listing on stock markets.”
He added that “I’m also very interested in Scandinavian countries. There’s a couple of sovereign funds that have dipped into cannabis, and state funds in Denmark that have invested in scientific cannabis businesses with government support and support from the pharma industry. Danish biotech companies have European venture capital backing, as well as public market access. This creates a vibrant ecosystem, with entrepreneurs providing for local patients and international players seeking foreign investments, as well as people looking to acquire businesses in Denmark. The mix between public and private capital supports an existing patient base. And in Switzerland, the recreational pilot is creating interest in the cannabis sector, and attracting different types of investors.”
Moore concluded that “as we’ve seen in North America, the blurred lines between adult recreational use and medical cannabis haven’t helped, both from the state and in the eyes of worried members of the public. But we needn’t make the same mistakes. In Europe, policymakers are seeking to avoid mixing up the various cannabis sectors. In terms of investment hype, I think we want to avoid the mistakes of that here, too. Understanding this will help investors avoid some of the mistakes in North America, and make cannabis easier for people to understand in Europe.”