EPISODE #55 Cannabis Investing in Europe with David Bonnier, Founding Partner at Enexis AB

How is the investing landscape evolving in European cannabis?
 
This week we’re joined by David Bonnier, founding partner at Enexis AB, Stockholm based investment company within the legal cannabis industry. 

Join us this week as David shares his insights into European investment in the space. We discuss attitudes towards cannabis in Sweden, why investing in ancillary businesses is a good idea, and why North American businesses are so keen to invest in Europe.

Episode Summary

• After David graduated, he worked at Deutsche Bank within business development in their global markets and equities division, where he stayed for 6 years. He then moved over to working in Hedge Funds where he stayed for 12 years, moving around the world with his job. 
• David had a family member who developed cancer and who was in a great deal of pain, this was when he started researching Cannabis for pain management. This was where his interest started.
• Three years ago David decided to enter the business of Cannabis, with investment from multiple family offices he launched a European based investment vehicle Enexis AB.
• ENEXIS AB focuses on investing in companies involved in plant-based medical, wellness and industrial applications, notably cannabis and hemp.
• To date the company has made 12 investments, 7 of which are in Europe. 
• Initially, CBD companies and medical cannabis companies were readily available, but the ancillary part of the market is now evolving at a rapid pace.
• The company has invested in companies such as Cannabis Europa, Prohibition Partners, Dragonfly Biosciences, and AlphaGreen. 
• Sweden is very conservative country in regards to the consumption of drugs, there is a strong stigma against drugs in the country which is taught to children from a young age.
• There is a government drug strategy called the Comprehensive Strategy for Alcohol, Narcotics, Doping and Tobacco (ANDT), who update drug policy regularly. Despite this, Sweden has the second highest number for drug related deaths in Europe, with an increase in drug supply and drug related deaths in recent years. 
• Debate around drugs in Sweden is very polarised and specific debates around medical cannabis have been lost in the chaos. There have been government sponsored surveys looking into attitudes towards drug consumption as a whole, but never any specifically geared towards using medical cannabis. 
• Many North American cannabis businesses have made investments into Europe in a panic due to uncertain markets on their home soil. David wonders how profitable these ventures will be in the short term.
• Although CBD and cannabis companies do not tend to have issues opening bank accounts in Europe, loans are hard to come by. 
• Enexis AB are focusing on brands and ancillary businesses, alongside vertically integrated businesses for their high profit margins.
• Vertically integrated businesses are those who facilitate both the production and distribution of their products, the benefit to these businesses is that margins are protected if parts of the industry for example the production of raw materials collapse. These businesses are very efficient within Europe as products can be shipped across borders without punishment, this contrasts with the USA where it is illegal to cross state borders with cannabis products. 
• The public collapse of the Canadian market in 2019 has affected the amount of funding available to private companies, with less now being available.

The market in Europe has developed probably a lot faster than we expected, and the level of teams and confidence are better than we expected on the offset 06:00

Resources
Join David on LinkedIn: https://www.linkedin.com/in/david-bonnier-07253b121/
Join David on Twitter: https://twitter.com/bonnier_david
Sweden’s 2019 Drug Report: http://www.emcdda.europa.eu/countries/drug-reports/2019/sweden/national-drug-strategy-and-coordination_sl
Enexis AB Website: https://www.enexis.se/

Posted in Investors