A couple of significant acquisitions in New Zealand’s medical cannabis sector were announced this week by Rua Bioscience and Cannasouth.
The first was an announcement by Cannasouth Limited (NZX: CBD) that it will acquire the balance of what it does not already own in its cultivation joint venture business with Craig Family Interests.
Cannasouth will acquire the remaining 50% of the shares on issue in Cannasouth Cultivation together with all of the shareholder loans advanced to Cannasouth Cultivation by Craig Family Interests, for an aggregate purchase price of NZD $3,540,000.
Cannasouth Cultivation is a growing and processing facility that will produce medicinal cannabis flower biomass. Construction and commissioning of the facility has been completed and it’s now ready to begin the first commercial crop.
“This is a significant milestone in Cannasouth’s strategy to become a fully integrated seed to sale medicinal cannabis business,” said the company.
Cannasouth was New Zealand’s first medicinal cannabis company to list on the NZX.
Just half an hour after that announcement was released, Rua Bioscience (NZX: RUA) announced the signing of an agreement to acquire 100% of Zalm Therapeutics Limited, another medicinal cannabis company based in New Zealand.
Rua Bioscience says among the benefits of the deal will be significantly earlier access to GMP, export-quality cannabis oil products at scale by the middle of next year.
One of Zalm’s key shareholders and partners is Australia’s Cann Group (ASX:CAN), which is building huge cannabis production facilities near Mildura in the Australian state of Victoria. It’s been a challenging project for Cann, but according to Rua the project is in the final stages of commissioning.
“Combining speed to market with long-term preferential access to substantial volumes of competitively priced product will enable the company to build a meaningful market presence faster and with a greater economy of scale than our current capacity or that of any other New Zealand medicinal cannabis company,” stated Rua Bioscience Chairman Trevor Burt.
Rua says it will invest more than $7.5m in sales and marketing over the next four years in order to accelerate its New Zealand and key export market activities.
Rua Bioscience was spun out from from Hikurangi Enterprises, which was the first company to secure a license to cultivate medicinal cannabis plants in New Zealand.