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SPAC deal brings Greek cannabis company to London

An industrial hemp (Cannabis sativa) plant at the Agropolis parc of the Polytechnic University of Catalonia in Viladecans, near Barcelona, Spain. Photo: Josep Lago/AFP via Getty Images
An industrial hemp (Cannabis sativa) plant at the Agropolis parc of the Polytechnic University of Catalonia in Viladecans, near Barcelona, Spain. Photo: Josep Lago/AFP via Getty Images (JOSEP LAGO via Getty Images)

A Greek medical marijuana producer is heading for the London Stock Exchange (LSEG.L) thanks to a SPAC deal to take the company public.

UK SPAC Plc, a London-listed shell company, said on Monday it had agreed a reverse takeover with Hellenic Dynamics, a European medical cannabis cultivation company. The deal values Hellenic at £45m ($62.5m).

The transaction combines two of the hottest trends in public markets over the last few years: SPACs and cannabis. Both corners of the market have attracted huge amounts of investor attention, as well as some concerns about hype and froth.

Read more: Kanabo to be Europe's biggest public cannabis business after takeover


Hellenic Dynamics, founded in 2019, is currently building a 200,000 square meter cannabis cultivation factory in Northern Greece. The company hopes to start selling medical grade cannabis oils and flowers by early next year and has already signed two term sheets for distribution deals.

"This is a major step forward for Hellenic as we look to establish ourselves as a leading cultivator of THC dominant medical cannabis in Europe and develop specialist strains of cannabis specific to individual medical ailments," Hellenic's vice-president Davinder Rai said.

Europe's cannabis market is worth around £2.5bn but forecast to grow tenfold over the next half decade thanks to a wave of deregulation. Hellenic join other cannabis companies including Kanabo (KNB.L) and Cellular Goods (CBX.L) on the London market, after a clarification of rules last year opened the flood gates for medical marijuana businesses to list in London.

Read more: London-listed Kanabo signs Greek cannabis growing deal

"With patient demand for medical cannabis increasing and a willingness among governments to regulate and open up this important market we are very optimistic about our future as a listed company," Rai said.

UK SPAC PLC chairman Peter Jay said: "I am delighted that the company has been able to contract to acquire this extremely exciting and impressive company which has the ambition and the potential to become one of the major growers of medicinal cannabis in Europe."

Shares in UK SPAC were suspended following the announcement, in line with UK listing rules. The transaction is still subject to terms, including fundraising by UK SPAC. Hellenic will be listed on the London Stock Exchange's main market following completion.

Read more: London could be centre of Europe's cannabis economy, says vape CEO

The deal marks the first British SPAC transaction since a global boom began last year. SPACs — special purpose acquisition companies — are 'blank cheque' companies that raise cash by going public and then seek a private company to buy. The appeal for investors is access to a private business at an attractive valuation; for companies, it offers an easier way to list on public markets.

SPACs exploded in popularity in 2020 and early 2021 in the US, with hundreds of billions raised. Enthusiasm has cooled in recent months amid fears of an oversaturated market and the emergence of scandals at some SPAC companies, including at Lordstown Motors (RIDE) and electric vehicle maker Nikola (NKLA).

The UK has so far missed out on the SPAC boom. Regulators have sought to reform local rules in a bid to lure more shells to list in London but European SPACs have mostly opted to go to Amsterdam.

Read more: Losses grow at David Beckham-backed cannabis business Cellular Goods

UK SPAC PLC is relatively unusual in the field. The AIM-listed company was known as Mountfield Group until March when it pivoted to become a cash shell. Mountfield Group was a construction services company but the business offloaded its operations in favour of tapping the SPAC boom.

Watch: What are SPACs?