Hellenic Dynamics IPO: Top Cannabis Stock To Consider For 2023

Hellenic Dynamics could be at the forefront of Europe’s growing multi-billion-euro medical cannabis sector. The European cannabis market is expected to reach €37 billion by 2027, twice the size of the Canadian and North American markets combined.

Share Talk has been in contact with the company this week and Davinder Rai, CEO will be coming into the London studio to do an interview and update holders next week.

Hellenic Dynamics (LON: HELD) launched its long-awaited Initial Public Offering on the Main Market of the London Stock Exchange on Monday 5 December, shortly after raising £1.125 million of new shares in an oversubscribed equity raise. It is the first medical cannabis company to achieve the main market listing.

The shares rose to 0.23p by Wednesday but have since corrected to 0.21p apiece, leaving the budding business with a market cap of £3.84 million.

CEO Davinder Rai, who has led HELD since its inception, enthuses that the IPO ‘marks an important milestone not just for Hellenic Dynamics, but for millions of patients across Europe who are looking to be prescribed THC dominant medical cannabis.’

And for long-term investors with patience and a reasonable attitude to risk, the company could be an excellent portfolio addition for 2023.

Hellenic Dynamics: a brief overview

HELD was established in 2018 — which seems an age away but really isn’t — as a licensed cultivator and supplier of pharmaceutical-grade medical cannabis products. Operating from a dedicated 195,506 sqm facility in Northern Greece, it plans to export tetrahydrocannabinol (THC) containing dried medical cannabis flowers and flower extracts across Europe. THC is the key active ingredient of the cannabis plant.

For context, the European medical cannabis market was worth some €4.09 billion in 2019 and is expected to rise at a CAGR of 29.6% to €43.3 billion by 2027. Even a small slice of this market could see HELD shares rise exponentially.

Its higher THC dosage medical cannabis — as opposed to recreational — has already been approved for use in the UK, Germany, and much of the rest of Europe for dozens of conditions. These include common complaints such as anxiety, MS, PTSD, and Tourettes, and less well-known ailments with few proven treatments such as Gastaut and Dravet syndrome.

Rai has specifically highlighted the use of medical cannabis in treating chronic pain, arguing the condition is ‘one of the most expensive issues for the NHS and 26% of the UK population is suffering from it.’ With a million people in the country now using illegal unregulated recreational cannabis at present, he wants HELD ‘to be the supplier of choice to the NHS of high-quality, competitively priced and fully regulated THC-dominant medical cannabis.’

For balance, it’s worth noting that while the drug is legalised for medical use, and there is plenty of evidence of efficacy, there is some way to go with the cultural and medical acceptance of THC.

Drug reform agency Volteface recently conducted a survey highlighting the key hurdles including the need for more research for some applications, and a lack of clear governance, education, and support for prescribing cannabis products among the medical profession.

But as its use becomes more widespread, this problem should dissipate. And happily, given the long-term prospects, HELD is a company which is best invested in over the longer term.

It was awarded its Greek government-issued cultivation licence for 40,000 sqm back in 2019, with no limits on THC content, production volume, or export quantities. This makes it potentially one of the most lucrative European licences for the growing market.

Where next for Hellenic Dynamics post-IPO?

The company notes that there is mounting evidence that specific cannabis genetics have differing effects against particular pain indicators. Therefore, it has entered into multiple strategic partnerships, including with the American Farm School, Dimitra, and the Athena Research Centre to study the effects of these genetic components, with a view to conducting further research into their effects on pain indicators in human trials. This will allow it to build a valuable proprietary IP-protected library of THC-dominant genetics.

The company’s integrated model spans the cultivation of the plant, production, processing, and distribution. And it boasts low power usage and skilled labour costs by dint of its location in Greece.

In the near term, HELD already has two initial off-take term sheet agreements in place for its first target market, Germany. For perspective, Germany is the largest medical cannabis market in Europe with over 31 tons of medical cannabis flower imports in 2020 providing 300,000 patients access via prescription.

The country, which by some measures operates the largest economy and most political power within the EU, has also drafted a legislation framework which could make it legal for adults to own up to 30g of cannabis for recreational use.

Aside from expanding into this primary target market, HELD’s other strategic priorities include securing further supply lines into its secondary target market (the UK) and continuing to increase its total cultivation area.

Key financial data will be released when it first reports earnings as a Main Market member, and at this point, it is very possible that the Hellenic Dynamics shares could see a spectacular rise.

ShareTalk is looking to arrange an interview with CEO Davinder Rai at some point in the very near future.

This article has been prepared for information purposes only by Charles Archer. It does not constitute advice, and no party accepts any liability for either accuracy or for investment decisions made using the information provided.

Further, it is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

This article has been prepared for information purposes only by Charles Archer. It does not constitute advice, and no party accepts any liability for either accuracy or for investment decisions made using the information provided.

Further, it is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Author

Key References:

Hellenic Dynamics | Investor area

Hellenic Dynamics | Home

The European Cannabis Report: 7th Edition | Reports | Prohibition Partners

Volteface-Report-_-Known-Unknowns.pdf

Hellenic Dynamics 01_07_22


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