Medicinal cannabis startup Greenfern Industries to list on NZ stock exchange

Four years after its establishment in New Zealand’s Taranaki region, early-stage cannabis, therapeutics and wellness company Greenfern Industries is preparing to make its debut on the country’s stock exchange.

The start-up was granted approval this week to have its shares quoted on the New Zealand exchange.

It will hit the boards on 21 October with 84.3 million shares on issue at $0.25 per share and an indicative market capitalisation of just over $21 million.

Managing director Dan Casey said the public listing was a “major step forward” for the company which has grown through two crowdfunding rounds and a private placement round to raise more than $6.9 million.

“We have been working towards this goal for the past 12 months and we have been able to attract significant capital as well as appoint a strong board of directors to complement the business assets and plans that we have,” he said.

“We expect [a public listing] will enable us to attract capital when required so we can explore growth opportunities such as developing new products and establishing commercial relationships in New Zealand and Australia, and in overseas wholesale markets.”

Producer and distributor

Greenfern aims to become a leading New Zealand producer and wholesale distributor of medicinal cannabis products, hemp-based health and beauty products, and hemp-based food and consumer goods.

The company is primarily focused on research at its medicinal cannabis facility in the small village of Normanby, harvesting and selling its hemp crops for various applications.

It grows the hemp on land which has been leased under short-term arrangements at a primary site adjacent to its business on the North Island, and at a second site at Lake Hāwea on the South Island.

Harvesting is done by contractors for wholesale distribution to users of industrial hemp and as ingredients to producers of fast-moving consumer goods including a craft brewer and a company that makes a hemp-based substitute for meat products.

Greenfern also uses the harvest for its own range of body care products containing processed hemp seed oil and marketed to wholesale and retail customers under the MaTo brand.

Subject to the construction of an indoor growing and production facility, Mr Casey said the company intends to also commence processing commercial quantities of dry cannabis flower (or starting material) for medicinal use, and either produce medicinal cannabis ingredients and products itself or via a third party manufacturer.

Hydroelectric power

In December, Greenfern used the proceeds of its latest capital raise to acquire the Normanby hydroelectric power station close to the Taranaki site to run its indoor growing operation as well as its research and processing facilities.

The renewable energy will help minimise the costs of lighting and environmental control – considered to be two of the highest overheads in growing medicinal cannabis indoors.

It will also help the company maximise its sustainability practices.

“We have a significant benefit in having access to our power needs at cost rather than wholesale or retail,” Mr Casey said.

“This is a game changer in either allowing us to produce at a lower cost or create a larger margin on our sale prices [and] we are able to grow the plants in a more environment-friendly way which is really important to us.”

He said plans were in place to explore the station’s upgrade potential with a view to increasing its production capacity.

Commercial relationships

Greenfern is currently establishing commercial relationships with local and overseas companies in preparation for the receipt of licences to produce and distribute medicinal cannabis products.

The company has already entered into agreements with three overseas suppliers –  US-based Disruption Labs Inc and KelSie Biotech Inc, and British company Brains Bioceutical Corporation – for exclusive rights to re-sell products on their behalf in New Zealand once the licences are received and the products approved by local regulatory body Medsafe.

Cannvalate agreement

More recently, it entered into a white label agreement with Australian medicinal cannabis company Cannvalate, which will see Cannvalate manufacture and distribute products under the Greenfern label to pharmacies nationwide as part of its own product range.

In addition, Greenfern Pharma will be researching and developing novel pharmaceutical GMP cannabinoid medications suitable for domestic and international markets.

Greenfern director

Cannvalate co-founder and managing director Darryl Davies has been appointed a non-executive director of Greenfern.

Mr Davies is also a director of global cannabinoid products manufacturer Valens Australia Pty Ltd and also a Non-Exec Director of InhaleRx (ASX:IRX).