By Barbara Lewis

LONDON (Reuters) – Israel’s Kanabo Research aims this year to become the first cannabis company to list on London’s main stock market, as part of efforts to raise 4 million pounds for clinical trials and to launch over-the-counter products, its CEO said.

Cannabis companies have listed in Canada and Israel and lawyers say London has the potential to attract money from diverse sectors, including food and health, which can use cannabis as an ingredient.

Kanabo’s CEO Avihu Tamir said he sees better prospects in London than in more saturated markets, despite the upheaval caused by Britain’s looming departure from the European Union, and believes it is worth being a pioneer in overcoming regulatory hurdles.

“In this industry, the first-mover advantage is significant,” he said, adding that the first cannabis companies that listed in Canada remained the biggest.

He said Kanabo aimed to list in London in the final quarter of this year and he hoped it would be the first, but did not know how much competition it faced.

The London Stock Exchange said it couldn’t comment on potential listings.

In Canada, where the relaxation of cannabis laws culminated in legalisation for recreational use in October, venture capital that would previously be attracted to small mining companies helped to drive a surge of new listings.

In Israel, medical cannabis is one of the fastest-growing sectors on the Tel Aviv stock exchange, prompting the Israeli regulator to warn in May that it could become an investment bubble.

Kanabo already has a promise of 1.4 million pounds from Spinnaker Opportunities (L:), a cash shell listed in London which has said it is looking for acquisitions.

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Kanabo’s products are delivered through a vaping device, which has approval from the Israeli health ministry. It is also seeking to launch over-the-counter products in Germany and Britain, Tamir said.

Lawyers are cautious, though. While some cannabis-based products are available in shops in Britain, there are strict regulations and there is uncertainty over the extent to which laws will be relaxed.

“A lot of people are wanting to have a conversation about the sector, but investors need to tread carefully and take guidance to navigate what is a complex regulatory landscape,” Claire O’Donnell, a partner at Norton Rose Fulbright, said.

London’s Alternative Investment Market (AIM) for growing companies has already had a listing in the sector. GW Pharmaceuticals, a developer of marijuana-based epilepsy treatments, was listed there from June 2001 to 2016.

The company is still listed on the U.S. Nasdaq (O:) and its shares have risen more than 40% this year.

They received a boost in July after the company’s marijuana-based epilepsy treatment Epidyolex won a positive recommendation for marketing approval from a European Medicines Agency (EMA) panel for use as an additional treatment for two types of seizures.

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