The local stock exchange will get another cannabis company on its main board today.
Photo: RNZ / Angus Dreaver
Taranaki-based Greenfern Industries will debut on the NZX under a compliance listing, meaning there would be no share sell down or capital raise, for now.
Greenfern would have more 84 million shares on issue at an indicative price of 25 cents each, giving the company a market capitalisation of about $21 million.
Greenfern co-founder and managing director Dan Casey said the listing was another major step for the company.
"We expect that by being listed on NZX it will enable us to attract new capital when required so we can explore growth opportunities such as further developing products and establishing additional commercial relationships here in New Zealand and Australia, and with overseas wholesale markets."
Greenfern was founded in 2018 and produces hemp-based beauty and food products.
The company was yet to report a profit, posting losses of more than $1m over the past two financial years.
However, this was not uncommon for fledgling medicinal cannabis firms.
The company's prior financial statements show it posted revenue of $84,212 in the year ended March, compared with $23,118 in 2020, and $36,657 in 2019.
Most of the revenue was generated from the sale of hemp-based products and electricity it generated from a small hydropower station it owned.
Greenfern would have about $2.5m of cash in hand at the time of listing.
To date, the company had raised close to $7m in capital from crowdfunding and institutional investors.
Grenfern had plans to become the leading producer and wholesale distributor of medicinal cannabis and hemp products in the New Zealand medical market, Casey said.
However, the company's listing profile said New Zealand's medicinal cannabis regime was still in its infancy and there was some uncertainty about what further changes might be made and what consequences this would have on the company.
Future growth for the company would hinge on being successful with applications for product approvals and licences relating to medicinal products, the profile said.
"If the company is not successful with these applications, it will not be able to commence a medicinal cannabis products business which would likely have a material adverse effect on the extent to which the company grows its overall business," it said.
Sustainability
The company also had its sights on becoming sustainability leaders in the medicinal cannabis industry, which tended to have a large carbon footprint because of the high electricity needs, Casey said.
"The highest overhead in growing medicinal cannabis indoors is the cost of lighting and environmental control."
Casey said generating its own electricity was a "game-changer" for the business because it allowed the business to produce flowers at a lower cost.
The company was also setting up a high-tech aeroponic grow room that use less water, fewer nutrients and less electricity compared to other grow rooms.
Greenfern would be chaired by General Capital managing director Brent King.
Its other directors had a range of experience in startups, regulation, health products, banking and medicinal cannabis.