Hikurangi Cannabis Company raises another $7m
Construction of purpose-built cannabis cultivation and medicine manufacturing facilities on the East Coast is now progressing with Hikurangi Cannabis Company announcing its first wholesale investment round is fully funded.
A small number of high net worth investors have contributed an initial $7 million to complete the next stage of development for the first New Zealand company to receive a cultivation license. Another investment offer is likely to be pursued in the new year as milestones are achieved to further accelerate research and development activities.
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“These funds will be used to expand our local plant research and manufacturing capability, as well as grow our global footprint with a focus on emerging markets in Europe and Asia” said Hikurangi CEO Manu Caddie.
“The public support for our crowdfunding offer earlier this year was overhwhelming – literally, as the crowdfunding platform could not cope with the volume of traffic. The people of New Zealand seem to understand that we are creating the people’s cannabis company.”
“With four PhDs and some of New Zealand’s most experienced pharmaceutical professionals coming on board, we have an absolute commitment to the highest quality cannabinoid research and medicines development – but beyond that we’re creating a different kind of company.”
Mr Caddie said the global industry is quickly being taken over by investment bankers and big corporations.
“We had a lot of institutional investors interested in joining with us but the investors we eventually selected were the ones who really understood what we are trying to do. Not only do they bring significant industry experience but they also share our vision and values. This venture is a marathon not a sprint, so it is critical to have partners willing to invest together over the long run rather than those focused on a quick exit.”
Mr Caddie said the new investors would be announced in due course.
Hikurangi has already established global reach, recently appointing three business development managers in Europe and Asia. The company is discussing trade opportunities, collaborating on research and negotiating supply deals with organisations in nearly 20 countries.
“The best way to get affordable medicines to families in New Zealand is to develop international supply chains and collaborate on research so we share costs and reduce the price of proven medicines as quickly as possible.”
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Hikurangi made the decision in September to lead its own development in the design and building of cannabis cultivation and processing facilities after consulting with both existing and new shareholders.
The decision means that the consulting services provided by Rhizo Sciences concluded last month and a team of New Zealand based GMP experts has been engaged to take over the project.
"We were pleased with the assistance Rhizo provided to help us shape our plans and we wish them well for the future" said Mr Caddie.
“We had planned to outsource most of the early development but quickly saw how important it was to have the expertise retained within the company or available locally.”
The non-binding Letter of Intent signed between the two companies for product off-take from Hikurangi was no longer something either company was relying on. Hikurangi has subsequently signed a new Letter of Intent with a San Diego broker for larger volumes than the previous conditional offtake agreement with Seattle-based Rhizo.
“It feels great to be employing locals, especially local growers, but it also feels significant to be bringing some world-class expertise into the Ruatoria and Gisborne communities to help us move quickly.”
The company currently has 15 mostly full-time employees or contractors and a wider team of consultants focused on the building projects, with a number of new jobs to be advertised in coming weeks. The company has started negotiating with grower partners in other regions around New Zealand with the intention of scaling cultivation quickly once regulations are finalised for commercial production.
“Owning our own plans and processes will be critical for expansion and we’ve started discussing a partnering agreement with grower partners who have funding available to replicate our set up.”
Mr Caddie said there was a high level of collaboration within the emerging New Zealand cannabis industry. Approximately 30 representatives of New Zealand cannabis companies recently attended the CannaTech conference in Sydney, with most agreeing that Australia was the competition to focus on beating.
The best way to become a global leader now was for the New Zealand industry to work together and develop a regulatory system with the government that learns from others’ mistakes and leapfrogs other jurisdictions that are realising the problems with their policy settings.