- AsiaBaseMetals Inc. (“company”, “ABZ”) announced a cooperation agreement with a city within a member country of the European Union to obtain a license for growing and selling cannabis for medical purposes. Through company press releases, we speculate that the country is Croatia.
- Croatia is expected to have a cannabis market size of €7 billion by 2028 (Source: Prohibition Partners). According to the European Monitoring Centre for Drugs and Drug Addiction, cannabis is the most commonly used illicit drug in Croatia – cannabis use was 16% in Croatia (measured in 2015). Although we do not have updated figures, cannabis use in Croatia was 10.5% in 2012.
- Through setting up cultivation operations in Europe, the company has significant access to the emerging European cannabis market. Through our research, Europe is set to become the largest market for cannabis. Prohibition Partners estimates the cannabis market in Europe to be €123 billion by 2028 – multiples higher than the estimated Canadian cannabis market.
- As management has a track record of spinning out projects into new companies and distributing shares to investors, we speculate that the cannabis initiative will also be spun-out to a new publicly listed entity.
- There is no immediate work planned on any of its resource projects, including a 100% interest in the Gnome project in B.C., and a 100% interest in the Jean iron ore project in Ontario. ABZ is also awaiting lithium exploration permits in Myanmar.
- ABZ’s share price is up 236% since we initiated coverage in May 2019.
- Since our initiating report, CEO, Raj Chowdhry, has increased his ownership from 48.3% to 49.4% of the total outstanding shares.
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