Eco Equity, a private company based in London, cultivates cannabis and produces medicinal cannabis products for export. It is the UK’s most active foreign investor in the global medical cannabis market, according to greenfield investment monitor fDi Markets.

In a sector that is dominated by North American players, Eco Equity belongs to a small group of European-based greenfield foreign investors. In 2019, only 10% of all FDI projects in the legal cannabis market came from western European companies, despite an unprecedented year of global inflows, fDi Markets figures show. 


An all-time high of $2.6bn was spent on cannabis-related projects by foreign investors in 2019, accounting for 91 foreign investment projects around the world, according to fDi Markets. The majority of these went to South America, the US and Europe, in that order. This follows several years of exponential growth in the marijuana market, with FDI tripling for three years in a row. 

Safe bet

Among the flood of foreign investment projects in 2019 were two from Eco Equity, which set up operations in Africa and the Caribbean. 

In Zimbabwe, Eco Equity uses a business-to-business model, producing pharmaceutical-grade medicinal cannabis for export to the EU – predominantly Germany, where most of the company’s offtake agreements are based. 

However, its model in Antigua is more vertically integrated and business-to-customer orientated. “We looked to clone the American model of medicinal dispensaries. There is a huge market on the island, and they’ve also got a fantastic tourism trade,” says Zimbabwe-born Jon-Paul Doran, Eco Equity CEO and founder.

Eco Equity is the first licensed UK company to cultivate cannabis in Zimbabwe and Antigua for export. “I was about to move into South America, but was reluctant. Africa is bread and butter: invest where you know, where you’ve got a clear understanding of your path. It mitigates risks,” says Mr Doran.


He adds that Eco Equity’s unique selling point is its consistent quality at a low price. “We’ve got an advantage over North American and European producers; we produce the same quality, if not better, in Zimbabwe. The only other region that can compete for our price is South America – maybe Colombia,” says Mr Doran.

Spreading the risk

Early in 2020, the company launched the medicinal cannabis investment fund JPD Capital, a protected cell (or segregated portfolio) company based in Guernsey, in the Channel Islands. Cell 1 is Zimbabwe, cell 2 is Antigua, and cell 3 is soon to be announced.

“Having more than one managed operation, we wanted to develop a mechanism for safe investment, and to have the option to spread risk by investing in either one or all of our projects. Hence JPD Capital was born. We’re also looking at strategic acquisitions. Where we see value across the supply chain, we won’t be far off,” says Mr Doran, adding that he currently has dozens of companies contending for his investment. 

Under JPD Capital’s umbrella, Eco Equity aims to invest in entities from greenhouses to lighting, seeds to cultivation, agricultural suppliers to distribution and companies that play a huge part in the ‘seed-to-sale’ journey. 

JPD Capital already has investors from the UK, the Middle East and Europe, with minimum investment into the fund set at £25,000 ($31,000).

Early boom 

The legal cannabis market has witnessed an unequivocal boom in the past few years, making it one of the world’s fastest growing industries. 

However, some claim that the bubble may have burst. Although greenfield foreign investment shot up even further in 2019, cannabis stocks plunged in the second half of the year, while M&A activity plateaued. 

“Too many companies listed too early, without substance. You’ve got young companies running before they can walk, getting caught up in the green rush: 80% of companies in the industry are burning out. In the next two years, the cream will rise to the top,” says Mr Doran.

"The biggest market to export is Europe. For North American companies, they’ve got to get EU Good Manufacturing Practice accreditation, etc. It is not easy to break into that new market. Everyone has tried to jump on the bandwagon without enough knowledge of the sector,” he adds. 

Now the low

Mr Doran, who was interviewed before the coronavirus crisis hit the UK, believes that greenfield FDI will continue to hit low-cost producing countries, especially as more African countries open up their markets. 

It remains to be seen whether greenfield FDI, a slower moving and longer term type of investment, will slow down like the cannabis M&A and stock markets. This scenario now looks likely due to the impact of coronavirus on global markets.

For example, in terms of consumer demand, cannabis bought for smoking could see decreased sales due to the pneumoniac pandemic, much as cigarette sales have dropped. On the other hand, cannabis products that can be ingested may rise in popularity. 

On top of the Covid-19 crisis, the cannabis market remains shackled by major funding limitations. “What has been very difficult for many smaller or young companies, especially in the UK, is access to banking,” says Mr Doran.

Funding limitations

Despite being a multibillion-dollar industry, the medical cannabis industry is barred from mainstream banking on the US federal level, meaning federally regulated and insured banks in the US do not fund the industry. This has a knock-on effect for lenders around the world.

Subsequently, the legal cannabis industry is being financed almost exclusively by equity and 'mom-and-pop' investors. 

Meanwhile, UK-based cannabis companies have the disadvantage that legislation for the industry lags behind other western European countries, such as Germany. Switzerland’s financial framework for the cannabis market is also more advanced, which is why Eco Equity is likely to relocate there, according to Mr Doran.

He believes the UK economy is missing a major opportunity, and partly blames Brexit as a distraction. Now with the current coronavirus pandemic, this situation seems unlikely to improve.

This article first appeared in the April-June edition of fDi Magazine. The full digital version of the magazine is available here