UK taxpayer takes stake in cannabis products firm through Future Fund

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The British government has become a shareholder in a cannabis-based products company called Grass & Co, as well as a south London brewery and a Nordic yoghurt bar maker as part of its most recent investments under the Future Fund Covid-19 support scheme.

Chancellor Rishi Sunak launched the Future Fund in May 2020 to help lossmaking but fast-growing businesses that needed equity funding to support their operations through coronavirus lockdowns.

The scheme had a unique angle, however, offering these firms convertible loans that would turn to equity stakes at the next fundraising. It was aimed at promising tech companies that typically rely on venture fundraising.

But its funds have since been used by a wide range of companies, from the owners of Bolton Wanderers football club to a jazz-focused record store in north London. A number of businesses have also gone into administration, risking taxpayer money.

On Thursday, the government revealed the latest 75 firms that have converted loans into equity stakes, taking the total number of companies in which the British taxpayer has ownership to 337.

The Future Fund issued 1,190 companies with convertible loan agreements worth £1.14bn in total, which means many more of the advances are expected to be converted into equity. Third-party investors were required to at least match the Future Fund’s investment.

Bolton Wanderers plays Sunderland. The League One team from Greater Manchester is among the beneficiaries of the Future Fund © Isaac Parkin/PA

The most recent list includes Grass & Co, which makes cannabidiol-based health products, and Better All Round, a maker of products such as the world’s first round kitchen towel. More alcoholic drinks makers have also been included, such as the Gipsy Hill Brewing Co. and Modern Contradiction, which makes alcoholic seltzers.

Other companies with state ownership include Borrow A Boat, which provides vessel hire services, cricketing business BatFast Cricket Centres and Nimble Babies, a maker of child-friendly cleaning products. Carousel Ventures owns a business that makes underwear including bras and “game-changing tights that defy gravity”.

Other businesses in the Future Fund portfolio include Epsilogen, a London-based developer of novel therapeutic antibodies to treat cancer, and nDreams, a virtual reality games developer.

The British Business Bank, which oversaw the scheme for the Treasury, said that by creating a bridge to next equity funding rounds, the Future Fund supported the ventures “through a period of considerable economic disruption and now the recovery”.

Ken Cooper, managing director, venture solutions at the British Business Bank, said: “As a shareholder in these businesses, the Future Fund is well positioned to share in the benefits of their continued growth.”

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