In a first for New Zealand, medicinal cannabis research company Cannasouth has announced it will make an application to list its shares on the NZX Main Board through an initial public offering (IPO) during the second calendar quarter of 2019.
Based in Waikato, Cannasouth has received a licence from the Ministry of Health to carry out medicinal cannabis research in New Zealand. The licence also enables the company to apply for an import licence to import cannabis products for research.
The granting of the licence represents a major milestone for Cannasouth, whose management team has been involved in the cultivation and research of industrial hemp, and now medicinal cannabis, since 2002.
Cannasouth’s director of operations Mark Lucas says the company’s IPO will open more doors for future research into the development of advanced cannabinoid medicines and health-related products.
“The medicinal cannabis research industry is still very much in its early stages – we’ve only scratched the surface of what is possible,” he says.
Cannasouth is currently planning the construction of GMP (good manufacturing processes) cultivation and production facilities in Waikato, in anticipation of legislation changes that will allow the manufacture and sale of medicinal cannabis in New Zealand.
The announcement of Cannasouth’s IPO comes after securing first round capital investment from the CMP Growth Capital Fund, a fund that provides growth capital to emerging New Zealand businesses. It is anticipated that a further, modest pre-IPO round of capital raising will be undertaken before the end of this year.
Sean Joyce, principal of CM Partners, which manages the CMP Growth Capital Fund, says Cannasouth has all of the intellectual capital and attributes needed to be a leader in the medicinal cannabis industry.
“There is huge potential in this exciting emerging sector, and Cannasouth will be a welcome addition to the New Zealand capital markets when it lists next year.”
Cannasouth is chaired by Australia-based director Tony Ho, who has significant listed company experience, and will be joined on the board by former Federated Farmers CEO and experienced director Conor English. The board is further supported by a scientific and medical advisory board which includes Emeritus Professor Alistair Wilkins from the University of Waikato.
“We are delighted to have the support and backing of the CMP Growth Capital Fund and a wealth of experience and expertise from Tony Ho, Conor English and the members of our advisory board,” says Mr Lucas.
“Together we are excited about the future of the medicinal cannabis industry in New Zealand and the potential it has for enhancing patient outcomes.”
Cannasouth’s focus is on furthering medicinal cannabinoid research, specifically the extraction and refining of cannabidiols (CBD).
CBD is a non-psychoactive compound in cannabis and has been associated with managing a range of medical conditions, including cancer-related symptoms and neurological disorders such as epilepsy and multiple sclerosis.
Lucas says there has been significant interest from the public to invest in the medicinal cannabis sector, particularly with the global industry moving ahead rapidly.
“The global medicinal cannabis market is exploding. Some estimates show it will reach $US28 billion within five years, with other estimates placing it closer to $US50 billion,” he says.
“In New Zealand, we have a real opportunity to play a significant role in this market and position ourselves with our focus on quality, innovation and sustainability.”