Article – Dechert LLP: Medicinal Cannabis in the UK: Fund Structuring, Investment and Listing Considerations

CANNANNEW REPORT

JULY 21, 2021 The value of the global medicinal cannabis market is projected to reach US$62.7 billion by 2024, with over US$22 billion of that market generated by Europe and an estimated excess of £2 billion likely to be generated in the UK. Despite the potential scale of this nascent market, the UK seems to be relatively slow to issue permissions for medical cannabis companies to operate, with only two licences issued as of January 2021 for the cultivation of medicinal cannabis in the UK. Investing in medical cannabis involving the UK takes three main forms: structuring and operating an investment fund (potentially domiciled in the UK) planning to invest in medicinal cannabis assets (whether inside or outside of the UK); deploying capital to acquire or invest in medicinal cannabis companies (whether inside or outside of the UK); and listing a business on the UK markets which operates in the medical cannabis area. 1. Medical Cannabis Fund Formation, Management and Marketing Fund Formation 1.1 The first issue fund managers will need to consider when establishing a fund with the intention of investing in medicinal cannabis is where they wish to domicile the fund. For fund managers seeking to launch a medicinal cannabis fund, the normal domicile decision (typically based on tax and market expectations) can be much more complicated. This is because in many jurisdictions, the laws relating to medicinal cannabis are not clear and it may be difficult to identify a jurisdiction in which the fund can be domiciled with the clear support of local regulators. 1.2 For example, in certain jurisdictions, such as the Cayman Islands and Bermuda, provided that the underlying activities in which the fund invests are legal in the jurisdiction in which they are carried out, the fund should not face obstacles with the local regulators.…

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Source : Article – Dechert LLP: Medicinal Cannabis in the UK: Fund Structuring, Investment and Listing Considerations

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