A handful of small, young Australian firms are taking a chance on Europe in spite of the region’s diverse markets, hopeful that a capital-light investment strategy will diminish their risks.

Europe could be a hard market to crack as regulations vary by country, but favourable rulings for medical marijuana and potential demand are promising factors. The companies reckon that establishing an early base there and working with European partners will help them better negotiate different markets and steal a march on larger North American rivals.

Cann Group and MGC Pharmaceuticals are among many firms that have pushed into Europe, recently signing partnerships to distribute medical marijuana products and also exploring a dual-listing in the region.

Europe is much smaller than North America, already battling oversupply, but the market is a draw for Australian companies that contend with an even smaller home base.

“With prospects still limited largely to just the prescription market (in Australia), exports remain key to marijuana firms,” said Jo Paterson, founder and CEO of BOD Australia.

New South Wales-based BOD, valued at just $37 million, entered into distribution partnerships in the United Kingdom, Italy and Netherlands last year. Its stock surged two thirds in the period.

Read more at  https://www.msn.com/en-au/money/news/analysis-aussie-cannabis-firms-go-capital-light-as-they-roll-into-europe/ar-BB1dX9in?ref=hvper.com&mc_cid=17255e3ec8&mc_eid=178dec0b63