Kanabo, the medical pioneer behind the ‘cannabis Nespresso’, hits high on stock market debut

Shares in medicinal marijuana firm Kanabo - dubbed the cannabis Nespresso - more than tripled in value as the vape-maker made its stock market debut.

The Israel-based company which is developing inhalers to treat sleep disorders and relieve pain became the second such firm to trade on the London exchange after the UK’s financial watchdog gave the industry the green light last year.

Shares launched at 6.5p hit 20p as trading began, holding onto gains of around 300% throughout the afternoon to close at 19.5p.

While not in the in the same league of Canadian and US pot giants like Tilray, whose market cap is close to $4billion, the firm - which was taken public through a reverse takeover by shell company Spinnakers Opportunities - floated with an initial market cap of £23.4 million pounds.

Last week, the dual-listed MGC Pharma also more than tripled on its London Stock Exchange debut, soaring from an opening price of 1.475p per share to 4.25p leaving the company with a market cap of over £75 million.

Cellular Goods, the UK based firm backed by David Beckham is also seeking a listing, with London set to attract dozens more similar floats in coming months.

After years behind the curve in the growing market, the Financial Conduct Authority’s decision has paved the way for the City to become a hub for the cannabis sector: a London listing lends credibility to firms desperate to shrug off the product’s shadier associations.

Globally, the legal cannabis market is forecast to grow to £50bn in the next five years.

Funds from the Kanabo float will be invested in research and clinical trials into a cannabis treatment on insomnia. Other areas of research include pain and anxiety.

Chief executive Avihu Tamir said: "With the support of the FCA and London Stock Exchange, the medical cannabis industry is set to take off in the UK and in Europe, similar to what’s happened in North America. This is just the beginning."

The Israeli-founded firm makes vapes which release a specific dose of cannabis to treat sleeping disorders and pain. It operates on a Nespresso-style model, with the majority of its revenues coming from recurring sales of cartridges holding liquid derived from cannabis flowers.