19 Aug 2020

New Zealand medicinal cannabis company NZX bound

8:22 am on 19 August 2020

Medicinal cannabis company Rua Bioscience is headed for the stock exchange by the end of the year.

Cannabis plant. Marijuana plant.

Photo: Unsplash / Shane Rounce

The East Coast based company was recently granted a commercial licence to grow and supply cannabis-derived medicines and has signed an export deal with a German company to supply pharmaceutical-grade dried cannabis flower in the next 12 months.

Its chairperson Trevor Burt said the company is still finalising the share sale and float initial offering but regards the NZX as the best option to raise money for its future development.

"It will turbo charge us and take us from an incubator company to a fully commercial company."

The float and listing are planned for the fourth quarter, but precise timing would depend on market conditions.

All funds raised will be for new capital, and existing shareholders will not be selling down their holdings. It was also likely that Tairāwhiti residents would get priority for buying shares. 

Burt said the funds would be used to develop products, growing and processing facilities, and its German export market.

The company has emerged from Hikurangi Enterprises - a Ruatoria based medicinal cannabis grower which was started with crowd funding and local investment four years ago.

Rua Bioscience's Chief Research Officer Dr Jessika Nowak analysing in science testing lab.

Rua Bioscience's Chief Research Officer Dr Jessika Nowak analysing in science testing lab. Photo: Supplied

It has an 8000 square metre cultivation centre in Ruatoria and a extraction and manufacturing facility in Gisborne.

Chief executive Rob Mitchell said $6m had so far been invested in the venture.

"Initially the medicinal products to be manufactured from Gisborne will be CBD oil and dried flower for export. Like in Ruatoria, this facility is also designed to be easily extended as our production increases.

"Currently, our system can process 2200 kilograms per annum, but with planned expansion modules this can easily be increased."  

Mitchell said the first year's operation would aim to produce a few hundred kilograms of pharmaceutical-grade dried cannabis flower.

The stock exchange already has a medicinal cannabis company - Cannasouth- which floated last year June with a $10 million share offer.

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