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Hill Dickinson advises Spinnaker on publication of the first FCA-approved prospectus for a medical cannabis RTO on the Official List

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Hill Dickinson’s Corporate team is delighted to have assisted Spinnaker Opportunities plc (Spinnaker) on the publication of the first FCA-approved prospectus in connection with its proposed acquisition of Israel-based medical cannabis company, Kanabo Research Ltd (Kanabo), by way of a reverse takeover (RTO).    

Subject to Admission and the transaction being declared unconditional in all respects, Kanabo is expected to become one of the first cannabis businesses to join the Official List (maintained by the Financial Conduct Authority (FCA)) and the enlarged share capital of Spinnaker to be readmitted to trading on the Main Market of the London Stock Exchange.   

In support of the RTO, Spinnaker and its brokers raised gross proceeds of £6 million from a combination of a private placing and direct subscriptions.
 
On 18 September 2020, the FCA published an important policy statement setting out its approach to the listing of domestic and overseas medicinal cannabis companies on the Official List (FCA Policy Statement). Prior to the FCA policy statement, there was an effective moratorium on the listing of domestic and overseas medicinal cannabis companies due to the perceived risk of money-laundering offences under the Proceeds of Crime Act 2002 being committed by investing in cannabis-related companies. This created an uncertain environment for prospective issuers seeking to acquire access to UK regulated markets to fund the growth and development of their businesses.
 
The publication of Spinnaker’s FCA-approved prospectus, following the FCA policy statement, should provide optimism that London’s regulated markets are becoming a more welcoming destination for prospective cannabis issuers provided they are able to comply with current policy guidelines. 
 
Andrew Morrison of Spinnaker Opportunities Plc commented: “The unwavering support and expertise of the team at Hill Dickinson was central to the successful passing of this important milestone. They have been true partners in this pioneering journey.”

Jack Delaney, senior associate, Hill Dickinson, who led on the deal, said: “When our client, Spinnaker, decided to undertake a reverse takeover of an overseas cannabis business on the Main Market, key regulators had not yet established clear procedures or guidelines for determining their eligibility for listing. We are delighted to have assisted Spinnaker and Kanabo on becoming the first to have successfully navigated this process and which we expect will set a valuable precedent for the UK medical cannabis industry.”

About Hill Dickinson
The firm’s expertise in corporate law (including capital markets), life sciences, regulatory matters, commodities, international trade and healthcare law uniquely positions the firm to advise established and start-up medical cannabis and CBD/wellness companies in the UK and Europe on regulation, licensing, research, manufacturing, distribution, capital raising, M&A and joint venture transactions.
 

Jack Delaney | Hill Dickinson