Waikato medicinal cannabis company launches public share offer
Medicinal cannabis research and development company, Cannasouth Limited, has lodged a Product Disclosure Statement (PDS) for an initial public offering (IPO) of new shares to raise up to $10 million.
Cannasouth is the first New Zealand medicinal cannabis company to use a regulated offer to raise new capital. The offer opens on Monday May 27 and is expected to close on Friday June 14. Following completion of the offer, Cannasouth will list its shares on the NZX Main Board and in doing so, will become the first IPO to list on the New Zealand Stock Exchange in 2019.
Based in Waikato, Cannasouth has been granted licenses from the Ministry of Health which allows the company to grow a variety of medicinal cannabis cultivars, to possess controlled drugs and extract, and to process and manufacture products for scientific research. Cannasouth has also received licenses to import cannabis which have been used to import dried cannabis flower from the Netherlands for research and to provide initial cultivar seeds for its growing facility.
Cannasouth raised new capital during 2018 which was used to hire key staff and complete construction of its initial cultivation and research facilities. Planning has now started to establish GMP (good manufacturing practices) production facilities to manufacture cannabis medicines once the regulatory framework is finalised.
CEO Mark Lucas says the company’s IPO will provide capital for further research into the development of advanced cannabinoid medicines and health-related products.
“As an industry, medicinal cannabis research is still in its early stages, and there has been significant interest from the public to invest in the sector,” he says.
“Globally, the market is moving ahead at a rapid pace and we believe New Zealand is well positioned to play a significant role in the industry globally through a focus on quality, innovation, and sustainability.”
Lucas says Cannasouth is focused on furthering its medicinal cannabinoid research, specifically the extraction and refining of cannabinoids and exploring the properties of other rarer compounds and how they can assist in treating medical conditions.
“It is our intention through ongoing, rigorous research to start exploring more treatment options to further improve patient outcomes. We know cannabis-based medicines are helping a lot of people, and it is our goal to develop advanced, high-quality medicinal cannabinoid products.”
Funds raised from the IPO will be applied towards the following:
- Advancing research and product initiatives;
- Investigations into a site for the construction of new scalable commercial processing and research and cultivation facilities as regulations are developed and such expansion becomes commercially viable;
- Additional staffing;
- Increasing working capital;
- and Paying for the costs associated with the offer, and the listing of the company’s shares on the NZX Main Board.
Lucas, alongside co-founder Nic Foreman, has been involved in the cultivation and research of industrial hemp since 2002. In 2016, they moved their focus to medicinal cannabis and received funding to undertake cannabis research projects with the University of Waikato.
Cannasouth’s board is chaired by Australia-based director Tony Ho and includes former Federated Farmers CEO Conor English as an independent director.
Cannasouth’s business and science advisory group includes US-based medicinal cannabis company expert Zach Sufrin, and University of Waikato scientists Emeritus Professor Alistair Wilkins and Associate Professor Brett Langley.
Auckland based corporate advisory firm, CM Partners Limited, is advising on the IPO and is the NZX sponsor for the listing.
Cannasouth’s product disclosure statement and offer details are available on the Disclose Register, disclose-register.companiesoffice.govt.nz, offer number ‘OFR12639’ and on the company’s website cannasouth.co.nz.