wallstreet: online: Mr. Ringler, you have great news to announce. Why is?
Carsten Ringler: Yes that’s true. I am proud and happy to announce that our new fund has now started. This is probably the world’s first mutual fund – with a special investment focus on companies from the cannabis and psychedelics universe.
wallstreet: online: That sounds very interesting. Please tell us more about it!
Carsten Ringler: With the complete legalization of cannabis in Canada in 2018, the sector has come into strong investor focus. The high demand for shares on the part of investors, but also speculators, has meant that a strong price bubble has formed at times. As expected, this burst in 2019.
The mass euphoria at the time led to the listing of many dubious companies. At times there were more than 400 companies in the sector. Now many companies with bad balance sheets and unrealistic business models have disappeared again.
The nice thing is that with the recent crash, the ratings of the top companies have come back significantly. Therefore, now is an almost perfect entry point, which we can make maximum use of with the launch of our new fund for investors.
I have been analyzing the special sector for many years and found the disruptive potential of cannabis in various areas and applications very fascinating from the start. The possible uses are really enormous. Above all, I see the great therapeutic uses of cannabis and pychedelics in next-generation drugs.
wallstreet: online: Exciting! Before we talk in more detail about the sector, I would like to hear about your personal background.
Carsten Ringler: With pleasure, I have been active in leading management positions in various capital market areas for almost 30 years. In my previous role as managing director at a German securities trading bank, I was responsible for compliance, commodity trading and fund advisory for a mutual fund for commodity stocks.
As an investment banker, analyst and former broker and securities dealer, I can now apply my acquired expertise in trading and in the valuation of investment instruments in this still relatively young asset class. We have put together a strong team of sales, marketing and analysts and are pleased to present interested investors with an exciting new fund product. And at the perfect time!
wallstreet: online: Isn’t the cannabis market more of a niche market so far? What makes you so optimistic and why should investors invest in the sector now?
Carsten Ringler: We are all just witnessing the emergence of a new global mega-growth market that will shake up entire industrial sectors such as the pharmaceutical, beverage and tobacco industries.
Countless new products have already been developed in recent years and in a few years certain cannabinoids such as CBD, THC and CBN will be an integral part of many new product lines. We expect more and more companies from the pharmaceutical, beverage and consumer goods industries to jump on this bandwagon and develop cannabis products.
Market research institutes and well-known banks & brokerage houses are overturning their growth forecasts: BDS Group & Arcview estimate that the legal cannabis market could increase from 14.9 billion US dollars in 2019 to up to 42.7 billion US dollars in 2024. Grandview is even more positive – the research house expects the cannabis market to explode to as much as 73.6 billion US dollars by 2027.
We in portfolio management also see the enormous potential of therapeutic applications for over 100 different cannabinoids. GW Pharmaceuticals, for example, received FDA approval for the epilepsy drug Epidiolex in November 2018. The highly potent CBD has proven very successful in reducing epilepsy attacks in children. The share did accordingly well! The list of diseases in which THC / CBD has positive effects on healing or symptom relief is getting longer and longer.
In addition to the medical benefits of the valuable cannabinoids, there are other possible uses. Just think of creams, ointments, tinctures, drinks, edibles such as chocolate or the food supplement market – there are no limits to the imagination.
As always, it takes time before a new market with the corresponding products is established! It was therefore important to us not to start the fund in absolute “hype”, but now, while the wheat is being separated from the chaff and the good companies are making nice profits! We have already identified the most promising companies and will gradually buy them into the fund! The investor thus benefits from a broad diversification of the best stocks in the sector and can avoid high individual risks!
wallstreet: online: Canadian cannabis stocks in particular had a disastrous year in 2019. Why did it come about and how will it continue there?
Carsten Ringler: Yes, that’s right and it was no surprise. We expected that and therefore waited before the fund started. The Canadian cannabis sector suffered a major setback in 2019. Share prices have fallen 50 to 90 percent. The reasons for this were various fundamental weaknesses and wrong decisions at some companies. There were bureaucratic hurdles in various Canadian provinces when approving and opening cannabis outlets. Some of the investors and speculators had sky-high expectations.
Canadian cannabis stocks continue to face significant headwinds. They’re looking to make a profit, of course, but estimates of the amount of legal cannabis sold monthly by Health Canada in July show no sign of improvement. The stocks are disproportionately high compared to the demand and that with further falling sales prices. As a result, it remains difficult for Canadian producers to make a profit.
I expect further consolidation in the Canadian market. Still, I don’t see everything as negative. Demand on the private as well as the medical side will pick up again and then we will see a recovery in healthy and strong cannabis stocks in Canada.
There is now a great opportunity for the sector in the USA. There we are now in the same phase as in Canada a few years ago when medical legalization was imminent. There is still a huge catalyst ahead of us in the US and there are some very promising public companies in the market. Therefore, financially strong, so-called Multi-State Operators (MSO’s) represent an important investment component in our fund strategy.
wallstreet: online: You mentioned the possible uses of cannabis. How big do you estimate the global medical cannabis market alone?
Carsten Ringler: It’s enormous. The medical use of cannabis is already possible today for various clinical pictures and symptoms such as epilepsy, anxiety disorders, pain or depression. And research is being carried out worldwide into the possible healing effects of the over 100 cannabinoids.
Take Canada, for example, with a population of around 37.6 million as a reference value: At the end of March 2020, a total of 329,038 patients were registered in the medical cannabis register, which is around one percent of the total population. Canada only has a small population. There are currently a number of countries that have approved the medical use of cannabis, including Germany, Australia, Italy, Switzerland, Mexico and Israel – to name just a few.
But the potential overall market is much bigger: Let’s take a look at the USA and the population of various continents: in Europe (around 746 million), South America (422 million) and the USA with 327 million inhabitants. If only one to two percent of the population (total approx. 1,532 million inhabitants) use cannabis products for medical purposes, we are quickly talking about 15 to 30 million users. Since the use of phyto-cannabinoids under medical supervision has hardly any side effects compared to drugs, we assume enormous growth rates in the number of legal cannabis users in the coming years.
There are also various mega-markets such as food supplements, wellness and health, pet supplies, beverages and foods mixed with cannabinoids. In a recent survey in England, 2.8 percent of those questioned stated that they use cannabis products regularly, primarily for the treatment of health problems. Extrapolated to the population, we are talking about over 1.5 million possible cannabis users.
wallstreet: online: The new fund also intends to invest in psychedelics stocks. Why psychedelics? What does this mean and what are the options?
Carsten Ringler: Psychedelics are psychoactive substances that cause changes in perception, mood and cognitive behavior of the subject. In this state, sensory perception, mood, thinking and self-awareness can change profoundly. In contrast to other states of intoxication, such as those caused by alcohol, the person affected is wide awake. This should lead to the patient dealing with his fears and problems and thus initiating an improvement. There are various psychoactive substances on the market. Psilocybin, LSD, MDMA, ketamine or ibogaine, to name a few.
wallstreet: online: What do psychedelics make so special?
Carsten Ringler: Psychedelics have the potential to revolutionize the mental health industry as we know it. This opens up a new billion-dollar market for investors.
Companies like MindMed are among the first publicly traded companies to focus on the psychedelics sector and develop psychedelic drugs for public use. The most recent IPO in Canada caused enormous media coverage and was one of the largest in terms of volume in recent years! Countless new psychedelics stocks followed. A completely new market segment is emerging here!
But what are psychedelics? These are hallucinogenic substances that are still banned in most countries. But now a new generation of researchers and scientists are investigating the effectiveness of these psychedelic substances and they have come to astonishing results. On the basis of an increasing number of studies, scientists have long come to the conclusion that microdosing substances that alter minds can treat and heal some mental disorders.
wallstreet: online: What diseases can psychedelics possibly treat?
Carsten Ringler: Depression, anxiety, and addictions would be the main diseases to treat, I would say. The need for therapies with alternative treatment approaches to the common psychotropic drugs is huge. Those affected have the hope of better tolerability and effectiveness of psychedelic active ingredients compared to conventional psychotropic drugs, especially in the case of depression and anxiety disorders.
For some patients, conventional psychotropic drugs are not 100% effective. Several studies suggest that psychedelics may be able to fill this therapeutic void. Further clinical studies based on empirically proven effectiveness of psychedelic substances are needed.
There are also some very interesting facts and figures: for example, on the widespread disease depression: According to estimates by the World Health Organization, around 322 million people are currently living with depression. This makes it both the most common mental disorder and the most common cause of disability worldwide. In addition, the rates of depression have increased: Between 2005 and 2015, the diagnosis of depression rose by more than 18 percent. More than a third of people do not respond to currently available therapeutics.
wallstreet: online: These are impressive numbers. But now back to the fund. Can you explain your investment strategy to us?
Carsten Ringler: We have developed a multi-level analysis system. First of all, we define individual allocation quotas at portfolio level for cannabis sub-segments that are important to us, such as MSOs or biotech companies specializing in cannabinoids. Then we screen the most attractive companies from the title universe of over 400 companies. In addition to top management, a solid balance sheet, meaningful partnerships and strong cannabis brands are important to us. We also question very carefully what the individual growth strategy looks like and how it is financed. For the remaining fundamentally strongest stocks, we then define technical chart levels for the right entry and for profit-taking.
wallstreet: online: What should investors pay attention to when they want to get involved in the cannabis market?
Carsten Ringler: Investors should not underestimate the risk of individual investments in particular. It’s basically like playing the lottery in this relatively new asset class. This can very quickly lead to a total loss of the hard-earned money. Rather, use the experience of experts who are familiar with it and spread your risk intelligently across many companies, as is easily possible with a fund.
Trust in the expertise and experience of the portfolio management team at GF Global Cannabis Opportunity Fund. With a strategic investment in the GF Global Cannabis Opportunity Fund, you are investing in an actively managed basket of promising cannabis and psychedelics stocks that particularly benefit from global megatrends.
Our fund is the world’s first publicly listed fund with an exclusive focus on psychedelics and cannabis stocks. The strategically diversified investment portfolio consists of 20 to 50 attractive companies in order to enable balanced risk diversification. With the help of our multi-stage security selection process and sophisticated risk management with clearly defined chart entry and exit signals, we navigate the fund through the new investment segment. The demand is already huge! We look forward to exciting times together with the fund investors!
wallstreet: online: Mr. Ringler, thank you very much for the interview!
Background information on the fund:
The team of experts of the GF Global Cannabis Opportunity Fund (WKN: A2P2FA, ticker: CANABIS LE) analyzes the trends in the cannabis and psychedelics sector for you and allocates them to the most attractive companies of the two investment megatrends. The security selection process includes, among other things an in-depth analysis of the balance sheet and the technical situation of each share with clearly defined entry and exit points. A quick reaction to company and industry news is essential for sustainable investment success in this relatively young sector!
Trust the high level of expertise and many years of experience of the fund management and read more information about the fund here.
Further information on the fund can be found on the website of IFM Independent Fund Management AG.
Brief profile of the fund:
GF Global Cannabis Opportunity Fund
|Fund type|| |
Undertaking for Collective Investment in Transferable Securities (UCITS / UCITS) /
(suitable as UCITS target fund)
|Ticker Bloomberg||CANABIS LE|
|Subscription fee||Max. 5% (100% discount on the front-end load by smartbroker.de)|
|Use of success||Accumulating|
|Management compensation||1.30% p.a.|
|Performance fee||15%, hurdle rate 6% and high watermark|
|UCITS asset manager||First Personal-Financial.com Management Group GmbH|
|Depositary||Lichtensteinische Landesbank AG|
|Management company||IFM Independent Fund Management AG|
|Information point for investors in Germany||Hauck & Aufhäuser Privatbankiers AG |
Kaiserstrasse 24, D-60311 Frankfurt am Main
Risk warning for articles / interviews: Fund:
All published information is for your information only and does not constitute investment advice or any other recommendation. Long-term experience and awards do not guarantee investment success. Securities are subject to market-related price fluctuations that may not be able to be offset by the active management of the asset manager or the investment advisor. This information cannot replace a consultation. All information has been provided with care and to the best of our knowledge based on the state of knowledge at the time of creation. Despite all care, the data may have changed in the meantime. Further information on opportunities and risks can be found on the website www.hanffonds.de and www.ifm.li. The sales prospectus and further information are available free of charge in German from the management company IFM Independent Fund Management AG available. The UCITS asset manager is First Personal-Financial.com Management Group GmbH, Munich. The depositary is the Liechtensteinische Landesbank AG.
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