International

New Zealand – A Worthy Investment?

303views

With legislation being passed several months ago, there are still fewer than 10 companies making moves in New Zealand.

Regulations have yet to be released, and commercial cultivation licenses are not yet available. However, with the referendum on recreational use coming in 2020, these organisations are setting the stage to take advantage.

The Misuse of Drugs (Medicinal Cannabis) Amendment Act (the Act), which passed in November 2018, established the pathway to allow for cultivation and manufacturing, but only after quality standards and regulations are developed.

The Act also decriminalised black-market use for those requiring palliation, and removed CBD as a controlled substance.

Leading up to this change, a handful companies have been established (source – MoneyMorning New Zealand):

  • Nubu Pharmaceuticals — TV presenter and former Newstalk ZB host Mark Dye founded his own firm at the end of 2017. He has already managed to raise $500,000 through seed capital. Nubu is importing and distributing products for MGC Pharmaceuticals, with plans to established commercial cultivation once allowed.
  • Hikurangi Cannabis — Formed in 2015, this Gisborne-based firm already has a significant hemp operation running. They hold a research licence from the Ministry of Health to cultivate and research strains with both high CBD and THC qualities. To date, the company has raised over $5 million in crowd-funded shares.
  • Helius Therapeutics — Helius Therapeutics has multiple large research facilities in the Auckland area. They plan on focusing on the genetics side of the industry. Rich-lister Guy Haddleton has come on board with a group of local investors for a total of $15 million in investment. Helius holds a Ministry of Health licence to breed medicinal strains.
  • Cannasouth — Based in Waikato, Cannasouth has a suite of licences allowing them to possess, extract, process, manufacture, import, and cultivate cannabis for scientific research. The company has been working with the substance since 2002, when it was granted one of New Zealand’s first cultivation licences. The company is planning an IPO on the NZX in April or May of 2019.
  • Setek Therapeutics — Backed by an all-star board, this Taupo-based company plans to deliver cannabis from ‘seed to shelf’…eventually offering a NZ-grown product in liquid or oil form. On the board is former associate minister of health Peter Dunne, who allowed for the first legal prescription of cannabis for a coma patient in 2015. Setek expects licences to come through in the next couple months.
  • Greenfern — This recent arrival to the scene is based out of Taranaki and offers the unique characteristic of a hydropower-supplied facility. As electricity is a key cost for indoor growers, this clean and potentially unlimited source could offer a market advantage. They’ve raised $1.5 million via a crowdfunding campaign. Currently unlicenced.

On top of these companies, several Australian companies are importing CBD products: MGC Pharmaceuticals, Tilray, THC Global, and Elixinol.

Regardless of whether the referendum for recreational use passes in 2020, there will be a niche global market for New Zealand branded medicinal cannabis products, with a reputation of quality and consistency.

However, if the referendum is successful, the local market is set to be relatively substation.

According to Auckland University, half of New Zealanders aged 15–65 have tried cannabis (representing 1.5 million people), and one-in-six are regular users – nearly half a million people.

According to the UN, New Zealand is among the top recreational marijuana consumers in the world.

In July of 2018, the NZ Drug Foundation conducted a poll and found surprising support for a positive referendum result. Here’s what they found:

Illegal Decriminalise Legal Decriminalise/legalise
Personal possession 31% 32% 35% 67%
Personal growing 38% 29% 32% 61%
Growing for friends 69% 18% 12% 30%
For pain relief 13% 17% 70% 87%
For terminal pain relief 10% 17% 72% 89%
Selling from a store 60% 9% 29% 38%

Data source: NZ Drug Foundation

New Zealand may be a small country, but the potential for the small band of local companies is high.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blaise Bratter
Blaise Bratter is the Chief Contributor to CannabisIntel. Being involved in the Australian cannabis industry since legalisation in 2016, he is now Operations Manager for ASX listed company MGC Pharmaceuticals.

Get all the latest content delivered straight to your inbox.”