Workers attend to the cannabis crop.
Hikurangi Cannabis Company, a medical cannabis venture based in Ruatoria, has signed a Letter of Intent with Seattle-based Rhizo Sciences to produce 3000kg of pharmaceutical grade cannabis products next year, rising to 12,000kg by 2021.
The conditional offer is subject to the law change expected to pass in New Zealand later this year but represents US$119 million (NZ$160m) worth of product being grown on the East Coast over the next four years.
Hikurangi Cannabis managing director Manu Caddie says the deal is a lifeline for the region that has few high value products and unemployment levels well above the national average.
“We are very excited about the impact of this new industry for our communities on the Coast and for New Zealand as a whole,” Mr Caddie said.
“Thanks to the good work of other primary industries, New Zealand has a great reputation internationally for high quality food and natural health products. We have leveraged this reputation with international customers in the EU, Canada and Australia who want to access the highest quality medical cannabis products in the world.”
Mr Caddie said while the company was still in the establishment phase and was to open an initial public offer via the PledgeMe crowdfunding equity platform next month, plans were well advanced to complete construction and commission pharmaceutical-grade growing and processing facilities before the end of this year.
Global cannabis firmRhizo Sciences, a global cannabis consulting and brokerage company, has suppliers in Africa, Europe, Australia and North America.
“New Zealand has a major opportunity to develop the high CBD hemp industry and become a leading world producer,” said Rhizo Sciences co-founder and vice-president Dallas McMillan.
“The global demand for legally produced CBD is growing rapidly and producers can’t keep up. Hikurangi Cannabis is ideally positioned to deliver a world class clean, green product to supply our customers next year. We’ll be working closely with regulators to ensure Hikurangi can meet and exceed international benchmarks for quality, safety and security.”
The deal includes CBD extracts, whole flowers and THC extracts, but will only be finalised once New Zealand establishes a scheme for the commercial production of medical cannabis products later this year.
“Our submission to the Select Committee next month will press home the importance of allowing medical cannabis to be exported,” Mr Caddie said.
“This is the key to ensuring we can offer affordable local medicines by funding the infrastructure and compliance costs through wholesale and finished product exports. We will be much more like Zespri than Fonterra in terms of the impact of product export prices on the domestic market. Hikurangi is committed to delivering proven medicines to Kiwis at affordable prices. We won’t be raising prices here just because we can fetch good prices offshore.”
Mr Caddie said a number of international buyers interested in buying New Zealand-made medical cannabis products had contacted the company.
“The Minister of Agriculture in Victoria, Australia recently pointed out that the Canadian legal cannabis market is worth US$10billion and Canada can only supply 15 percent of the anticipated demand.
“There is huge scope for New Zealand to produce the highest quality medical product in a global sector expected to reach US$60 billion within five years.”