The medicinal cannabis industry is showing signs of maturity following recent acquisitions in the sector.
(File image) Photo: flickr.com / creativecommons
Listed medicinal cannabis company Cannasaouth and Rua Bioscience announced acquisitions yesterday which would allow them to take greater control of their growing operations and access to new products and markets.
New Zealand Medicinal Cannabis Council executive director Sally King said the developments show the cannabis sector was maturing and attracting strong interest from investors.
"It shows there will be further co-operation and consolidation in the industry as it grows to become both a domestic supplier of medicinal cannabis product and also a strong exporter."
Cannasouth would be purchasing the balance of the stake it does not own in its cultivation joint venture project from the Craig family for $3.54 million.
Chief executive Mark Lucas said the deal meant it would now wholly own all of its group entities.
"There continues to be strong global demand for premium-grade pharmaceutical cannabis flower, which is the high value niche Cannasouth Cultivation is targeting," he said.
Soon after the announcement, Tairāwhiti-based Rua Bioscience notified the local stock exchange that it had entered into an agreement to acquire local medicinal cannabis company Zalm Therapeutics for $10m, which would be funded through an issue of new Rua shares.
It would mean the company acquires Zalm's products, distribution agreements in New Zealand, as well as its supply relationships across key export markets.
Zalm has one of Australia's leading medicinal cannabis firms, Cann Group, as one of its key investors and business partners.
Rua said the deal would give it earlier access to GMP (good manufacturing practice), export quality oil by the middle of 2022.
It said it would also allow the company to take advantage of Cann's scale, because it could tap into its long-term supply agreements.