Channel 4's venture arm invests in cannabis company - Financial Times
Channel 4 has invested in cannabis company Cannaray through its venture capital arm, placing a bet that the European market for medical marijuana and non-intoxicating cannabidiol products will continue to grow.
Channel 4, a so-called “public service broadcaster” that is owned by the UK government but funded by advertising, was the lead investor in a funding round that raised £10mn for the UK-based cannabis group.
The two parties would not disclose the size of the deal, in which the broadcaster’s Channel 4 Ventures obtains equity in Cannaray in exchange for advertising inventory on Channel 4, rather than cash. All profits from the venture investing arm are then returned to the TV network.
Vinay Solanki, head of Channel 4 Ventures, said his mission was to back “bold and disruptive categories”, adding that the European landscape for medical cannabis and CBD — a cannabinoid that does not leave users stoned and is sold over the counter — was “expanding rapidly”.
Channel 4 set up its venture capital arm in 2015 to tap new revenue streams. Solanki said Channel 4 Ventures was “highly profitable”, but would not give further detail. It has previously taken stakes in companies such as Pinterest and magazine aggregator Readly.
While the UK legalised cannabis for medical uses in 2018, the take-up has been slow, which industry executives have blamed on excessive red tape.
The liberalisation of cannabis laws is sweeping the world, however. Canada became the world’s first large economy to legalise recreational use of the drug in 2018. Several US states, such as California and Washington, have followed suit and the German government said last year that it was also planning to lift restrictions on the use of cannabis.
Scott Maguire, Cannaray’s chief executive, said the company was planning to use its newly acquired funds to expand its European medical cannabis business, primarily in Germany.
Maguire added that it would be tricky for the company to enter a German market for the recreational use of marijuana, however, because Cannaray had ambitions to list its shares in London and could fall foul of UK anti-money laundering rules as a result.
“Our goal is to become a leading player in medical cannabis in Germany and the UK — as legislation changes, we’ll keep an eye on it and act accordingly,” he said.
The company began advertising its CBD products in the UK last year, when it hired TV personality Claudia Winkleman to become a Cannaray ambassador.
Maguire said the deal between his cannabis company and Channel 4 was a sign that unease around cannabis was subsiding. “The stigma is being washed away every year,” he said.
Last week, the UK became the first country in the world to regulate the sale of CBD products by requiring vendors to receive approval from the Food Standards Agency.
