10 million dollars worth of stock in a medical marijuana company is up for grabs as R&D firm Cannasouth gears up to be the first company of its kind to get listed on the New Zealand Exchange (NZX).
The Waikato-based biopharmaceutical company, specializing in cannabis therapeutics, looks to raise a minimum of $5 million via invited investors and a further $5 million via an initial public offering (IPO), which also happens to be NZX’s first IPO in 2 years. Reportedly, Cannasouth plans to sell a whopping 20 million shares.
Only last year, Cannasouth had secured funding from CMP Growth Capital Fund, resulting in the latter being a 20% stakeholder in the rapidly-growing cannabis company.
Notably, the worldwide legal marijuana industry fetched over $15 billion in investment last year; while North America alone is expected to move past the $24 billion mark in 2019.
However, before you go out all guns blazing, keep in mind that some fund managers are skittish. At least four fund managers refused to go on the record about the Cannasouth offering, fearing that that could put them offside with their older, more risk-averse clients.
Simplicity CEO Sam Stubbs thinks that this isn’t surprising because the big players are cautious, provided that listing a weed company in New Zealand is unprecedented, and the industry potentially volatile.
Cannasouth holds licenses to cultivate cannabis, manufacture products for research and also to import viable seeds and dried leaf from countries like the Netherlands. “Through importing a diverse variety of cultivars, along with the dried flower from the Netherlands, we can further analyze the potential of both high THC and CBD varieties,” CEO of Cannasouth, Mark Lucas, was quoted as saying to Newstalk ZB in February.
Although large fund managers may be playing it conservative when it comes to cannabis, offshore IPOs in the therapeutics industry have led to huge earnings for ‘first-moving’ investors.