Shares of Snoop Dogg-Backed Cannabis Firm Lose 98% of Value

Shares of the British cannabis company Oxford Cannabinoid Technologies (OCT), which received investment from rapper Calvin Broadus, better known as Snoop Dogg, have plummeted by 98%. Investments in the cannabis industry have resulted in significant losses.

In 2018, Snoop Dogg’s venture capital firm Casa Verde purchased OCT shares worth £8 million (about 915.7 million rubles). Alongside the artist, tobacco company Imperial Brands also invested, bringing the total funding raised by the cannabis startup to £16.6 million (1.9 billion rubles). When OCT was listed on the London Stock Exchange in May 2021, its market capitalization was estimated at £48 million (5.5 billion rubles).

However, the company’s shares failed to attract demand and steadily lost value. By May 7, 2024, OCT’s share price had dropped by 98%, prompting the company’s management to halt trading on the exchange. OCT’s director, Clarissa Sowemimo-Coker, commented on the decision: “It’s a turbulent time. The last 12–24 months have been very difficult for small-cap companies, especially those in the biopharmaceutical sector. Company shares have lost 80–90% of their value. After such a steep decline, it’s hard to get the share price to recover.”

Currently, Snoop Dogg’s OCT holdings are valued at £1.9 million (217.5 million rubles). As a result, the rapper is facing unrealized losses of 76% (698.2 million rubles), not 98%. This suggests that his venture firm acquired shares at a price significantly below the market rate at the time of the London Stock Exchange listing.

OCT Has Yet to Release a Cannabis-Based Drug

OCT specializes in developing cannabis-based painkillers. The company’s management hopes to carve out a niche in the analgesics market, which has an annual turnover of at least £42.5 billion (4.9 trillion rubles). However, the company has yet to achieve success in this area, and investors have turned away due to poor financial results.

According to the latest report, in the 2023 fiscal year ending April 30, 2023, OCT’s losses increased by 26% to £5.9 million (675.3 million rubles). Over the year, the company spent £4.3 million (492.2 million rubles) on research and did not generate any revenue. Notably, in 2021, company representatives announced plans to release their first drug in 2027, so the lack of income did not come as a surprise to investors.

OCT has received approval from the Welsh government to conduct the first phase of clinical trials for its cannabis-based painkiller. If the drug is found to be safe in human testing, its effectiveness will be evaluated in the second phase of research. As a result, the company’s team may still be able to bring the medication to market within the announced timeframe.