October 6th, 2023 | 08:00 CEST
Cantourage Group SE, Amazon, British American Tobacco: Stockpiling between medical innovation and dividend history
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"[...] We are a producer and distributor of medicinal products and thus cover a crucial step in the value chain, especially within the cannabis industry. [...]" Philip Schetter, CEO, Cantourage Group SE
Born in Bielefeld, she studied German, English and psychology. The emergence of the Internet in the early '90s led her from university to training in graphic design and marketing communications. After years of agency work in corporate branding, she switched to publishing and learned her editorial craft at Hubert Burda Media.
Cantourage: Digital Fast Track Access platform offers significant growth opportunity
The medical cannabis market is growing. This year, global sales are expected to reach USD 12.92 billion, rising to a market volume of USD 23.97 billion by 2028 at a compound annual growth rate of 13.16%. That is good news for investors of Berlin-based Cantourage, which specializes in the distribution of medical cannabis. With an international distribution network and a future production facility in Franconia to process the green plant into a medical product, the Company, listed on the Frankfurt Stock Exchange since November 2022, is well positioned.
This November can also be extremely exciting for Cantourage. The Berlin-based company has been nominated for the "Star of Innovation" category in competition with European Small- and Mid-cap companies. Whether they win this category will be decided in Bilbao, Spain, on November 14, 2023. A total of 12 companies in 4 categories have been selected. Cantourage is competing for newly listed SMEs that put innovation at the heart of their business development strategy.
What makes Cantourage's strategy so special? In addition to its own production facility for the medical processing of external cannabis shipments in southern Germany, Cantourage explicitly relies on a strong, international partner trade network. The Company does not grow cannabis itself and has no plantations - its strength lies in the distribution of products from trading partners. With its proprietary "Fast Track Access" platform, Cantourage enables cannabis producers worldwide to access the expanding European medical cannabis market faster, easier and more cost-effectively by processing and distributing their raw cannabis materials and extracts.
It is essentially medical Cannabis-as-a-Service. The experienced team knows the European market inside and out and employs a multi-branding strategy in their re-seller shop. They also offer a protected Doccheck login for doctors in Germany. Registered physicians can use this to learn how and where to order the active substances on prescription.
Medical cannabis is used as a cannabidiol active ingredient (CBD) for patients suffering from muscle spasms, nerve pain or other painful symptoms in serious diseases such as multiple sclerosis or Parkinson. Medical cannabis meets the highest purity standards and is prescribed by medical specialists by prescription. CBD acts on specific receptors in the human body, affecting the release of neurotransmitters and leading to immediate pain relief. CBD also relieves anxiety and inflammatory processes in the body. Investors who focus on innovative and easy-to-follow growth strategies cannot afford to pass Cantourage by.
Amazon invests USD 4 billion in Healthcare AI
The healthcare business is a marathon, not a sprint. Amazon had to learn that the hard way in recent years. While the retailer initially thought it could streamline virtually everything logistically, the team in the healthcare division has had a tough time so far. Whether it was regulations or simply a lack of acceptance among customers, various reasons led to the cancellation of projects in this area in the past.
In 2019, Amazon launched "Amazon Care," a platform for telemedicine and personal doctor visits for its employees. It was discontinued in 2022. That same year, Amazon launched "Clinic," a telemedicine platform to treat 20 common conditions. In 2018, the Company acquired mail-order pharmacy PillPack, and this year, it bought membership-based primary care network One Medical for USD 3.9 billion. That gives the Seattle-based company two valuable assets in its healthcare portfolio. One is a physician network, which uses telemedicine to diagnose patients and write prescriptions; the other is an online pharmacy, which is used to fill prescriptions and ship prescription drugs and active ingredients, including medical cannabis.
Now, Amazon is experimenting with generative AI in the healthcare segment. AI is already being used in imaging diagnostics by radiologists and in predicting disease symptoms by German tech company Ada. Generative AI is the tool of the hour. Amazon, according to Wallstreet Journal, is investing in a generative AI called "Claude" from the Company Anthropic to compete against rival ChatGPT. At its core, this is about market monopolization.
Anthropic has been using Amazon's cloud service since 2021 and also uses Google's competing cloud service. Under the new agreement, AWS will become Anthropic's primary cloud provider for "mission-critical workloads." Anthropic plans to run the majority of its workloads in the Amazon cloud. Anthropic is said to be more secure and reliable than ChatGPT, which is especially essential when dealing with sensitive health data.**
British American Tobacco: Are domestic sales fizzling out under the law?
The opposite of healthcare and health are tobacco stocks. Investors who seek dividends may eventually turn to British American Tobacco. Founded in 1902, the Company is a manufacturer of cigarette brands such as Camel, Dunhill and Lucky Strike, as well as other nicotine products such as vapes. The Company employs over 50,000 people worldwide and pays its shareholders a quarterly dividend of around EUR 0.66 per share, or roughly EUR 2.64 per annum. The current share price is EUR 28.80. But is focusing on the dividend really everything?
Over 24 million consumers annually purchase the addictive products of British American Tobacco. Especially during the pandemic, many people turned to tobacco. But that alone is not enough for continued growth. Globally, the cigarette industry is recovering from historic lows in 2020 with volume growth of 0.5% in 2021 (-0.3% excluding China). However, North America, as the largest sales market, remains a constant drag on growth. Regulatory uncertainty and low public confidence limit the market here.
British American Tobacco is now facing an additional setback in the UK, its home country of all places. Prime Minister Rishi Sunak wants to ban tobacco consumption by minors by law. At the Conservative Party Conference in Manchester, Sunak proposed raising the legal smoking age so that 14-year-olds could never legally buy cigarettes. Investors promptly reacted, and the tobacco company's share price fell by 1.7%. Tobacco industry spokespeople immediately reacted with incomprehension to the prime minister's move.
The fact that Sunak wants to prohibit smoking for young people through legislation has a controversial aspect. Ultimately, the government seeks to regulate in private matters what should be the responsibility of parents or guardians. But when it comes to substances that can lead to addiction, it is complex, as Sir Chris Whitty, Chief Medical Officer for England, points out. He stated, "The overwhelming majority of medical and nursing professionals and health organizations support this ban." He dismissed tobacco industry claims that the ban would not be effective as unfounded. In an interview with the BBC, he said: "As a doctor, I have seen many people in hospital who are desperate to stop smoking because it is killing them, and yet they cannot - their choice has been taken away from them." Every investor has the choice to use their capital to support companies they believe are right and important. Tobacco growth projections seem to be giving way to common sense.
The Berlin-based company Cantourage has the best prospects for growth. The global medical cannabis market is expected to reach USD 12.92 billion this year, rising to USD 23.97 billion by 2028 at an average CAGR of 13.16%. Cantourage specializes in the distribution of medical cannabis and has an international distribution network. Thanks to its Fast Track Access platform, the Berlin-based company is rapidly expanding its distribution structures. It has the chance to win the Most Innovative Business Strategy category at the 2023 Small and Mid-Cap Awards. Amazon is also conquering the healthcare market again. This time, they have two solid companies on board, covering both online pharmacy and an ever-growing physician network. With the USD 4 billion investment in generative AI, there are more opportunities in their own AWS cloud business to establish AI, especially for healthcare partners. Out of time, however, seems to be British American Tobacco. The consistent dividend payer faces shrinking markets, a turnaround in its US sales market, and is also being ticked off at home by its prime minister. Rishi Sunak wants to ban the sale of tobacco to minors. Investors should compare the markets closely to make an informed investment decision on which horse to back for their portfolio. More small- and mid-cap companies will present digitally at the 8th International Investment Forum on October 10. Click here to register.
Conflict of interest
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