Naturally-sourced medicines are making a foray onto public stock exchanges with more than a dozen medicinal cannabis companies already listed, primarily, in Canada via the TSX and Australia via the ASX.
The latest contender is Fiji Kava (ASX: FIJ), which is offering a range of products based on the kava plant, a naturally-grown derivative of the local Yaqona plant that’s unique to the South Pacific and is not naturally present in any other region.
According to local South Pacific Islanders and laboratory researchers, the roots of every kava plant contain an active ingredient called kavalactones.
Fiji Kava has built up a business that manufactures kava plant-derived products containing high concentrations of kavalactones, with a view of taking this niche medicine mainstream not just in local Asian markets, but also further afield in places like Australia and the US.
Fiji Kava says it intends to commercialise the kava plant by manufacturing products for both the consumer discretionary, recreational and healthcare markets.
To do this, Fiji Kava hopes to raise $5.2 million at $0.20 a share in its IPO.
If successful, the ASX listing will mean Fiji Kava will become the first kava company to list on any stock exchange globally – literally a first-mover in this market niche.
With its IPO close to completion, the company plans to use a significant portion of capital it raises to complete trials on the therapeutic benefits of kava in treating anxiety, insomnia and pain.
Fiji Kava says kava is a superb tool to alleviate and manage stress – widely considered as the root cause for many other physical and mental ailments. According to US researchers, around 60% of people accept that managing stress is important, but only 35% say they manage it effectively.
Additionally, according to a research paper titled Stress in America published by the American Psychological Association in 2013, around 36% of people surveyed claimed their stress had increased in the past year.
Stress has therefore been deemed problematic, if 61% of adults say that managing stress is important, but only 35% are managing to do so.
At present, research into the medicinal properties of kava has been sparse, although there are some indications that it has positive medicinal properties in the treatment of stress and anxiety-related symptoms.
A 2013 study published in the Journal of Clinical Psychopharmacology found that standardised kava “may be a moderately effective short-term option for the treatment of generalised anxiety disorder”.
“We want to get kava into the western market. We have a whole lot of issues with opioids and with alcohol, and with cannabis coming along as a new player in the game, we think we’re an alternative,” said Fiji Kava’s founder and chief executive officer, Zane Yoshida.
Mr Yoshida claims he wants to bring the relaxing benefits of kava to the world and has assembled a series of kava-based products, including its leading brand Taki Mai, a kava root powder which can be consumed in a variety of ways to suit the consumer.
“We want to provide a natural remedy to people that are increasingly stressed and exhausted. We truly believe this is the answer,” said Mr Yoshida.
According to Mr Yoshida, kava is a traditional plant that is most often used in “social settings” in Fiji and the South Pacific islands as a “social lubricant”.
In cultural terms, Fijians consume kava for its relaxant properties whereas Western cultures consume alcohol and opiates.
With increasingly more scientific research indicating that natural medicines can provide excellent medicinal properties with comparatively fewer side-effects than synthetic opiates – consumers are shifting their spending away from artificial synthetics in favour of natural plants and herbs.
Governments from around the world are gradually taking notice with existing prohibition on cannabis and industrial hemp being relaxed in Canada, the US and Australia – three countries that are leading the field in legalising cannabis and facilitating stock-market listings for trailblazing companies like Fiji Kava.
“We’re currently just in the Fiji market, but we’ll be available post-IPO in Australia and New Zealand and in 2019, in the US. We also have approval for the supplement in Hong Kong. But we want to make sure the supply chain is secure with the vertical integration,” said Mr Yoshida.
Medicines derived from natural plants and herbs are clearly in vogue, in response to consumers clamouring for safer and more effective medicines, which tend to have far fewer side-effects compared to artificial synthetic alternatives that have been marketed to the public for decades.
A growing breed of companies is taking naturally-borne medicines to market with both investors and consumers anticipating a raft of benefits.
Already, companies such as AusCann (ASX: AC8) and Cann Group (ASX: CAN) and MGC Pharmaceuticals (ASX: MXC) have made their way onto the ASX and have raised their respective valuations significantly in a short space of time.
As a further sign of how the times are changing in favour of harnessing natural medicines, the world’s first cannabis-based drug Epidolex was approved by the FDA earlier this year for the treatment of epilepsy.
Although the drug is a synthetic (and therefore artificial) form of cannabis, the fact that it is the first cannabis-derived drug to be approved in US history suggests that healthcare is shifting from artificial to natural, albeit rather slowly.
If Fiji Kava can make its debut on the ASX, the company will present yet another natural option for health-conscious consumers which are rapidly turning away from alcohol, tobacco, processed food and artificial products in their droves.