Medicinal cannabis firm sells 20pc stake for $6m
Pure Cann New Zealand, which has former Air New Zealand boss Rob Fyfe as its executive chair, has secured $6 million from Australia’s Cann Group for a 20 per cent stake in the local medicinal-cannabis company.
The investment will be made over stages, with the initial 10 per cent to be completed on or before August 30, and a further 10 per cent when New Zealand regulations come into force and Pure Cann’s board approves the construction of its commercial cultivation facility.
The Government anticipates introducing new regulations, licensing requirements and quality standards governing medicinal-cannabis usage by the end of this calendar year.
ASX-listed Cann Group has the option to increase its position to 30 per cent.
Fyfe, Pure Cann’s second largest shareholder with a 25.2 per cent stake, said the move was a “pivotal moment for New Zealand’s medicinal-cannabis industry”.
The strategic investment and a technical services agreement — which allows for mutual sharing of intellectual property — “ensure that Pure Cann is now fully funded and, more importantly, allows us to leverage the cultivation, production and technical leadership of Cann Group”, the former Icebreaker chair said.
The move let the two companies work together to “capitalise on the growing demand for medicinal cannabis in New Zealand and explore potential export opportunities as Pure Cann develops its own proposed cultivation and production facilities”, said Cann Group chief executive Peter Crock.
Cann Group has established research and cultivation facilities in Melbourne and is looking to provide access to medicinal cannabis for Australian patients. Aurora Cannabis, one of Canada’s largest listed medicinal cannabis companies, owns 22.9 per cent of the Australian firm.
Crock said: “We are confident that Pure Cann will be able to leverage New Zealand’s global reputation for development world-leading premium and natural products.”