Cannabis 'lifeline' for East Coast and Gisborne

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 firm

Rhizo 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.”

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 firm

Rhizo 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.”

Your email address will not be published. Comments will display after being approved by a staff member. Comments may be edited for clarity.

Mary-Ann de Kort - 9 months ago
I can't quite figure out why cannabis needs to be sent to big pharmaceutical companies so they can extract the active drugs. What chemicals will they use to do this so they can make trillions in profit?
Then there is the whole transport and distribution machine to be paid.
Although not a user or an expert, I understand that the natural plant works very well.
Not only is it likely to be safer as there won't be any additives, but it would save precious Pharmac dollars which could be redirected to less natural products.

Manu Caddie - 9 months ago
Thanks for sharing your questions and suggestions Mary-Ann.
There are a few extraction methods for any botanical extract - Supercritical Fluid Extraction using CO2 under high pressure is the preferred method because it is clean with zero residue in the product. Ethanol and Methanol are other popular solvents used to separate and refine the active ingredients from plant material.
I don't think anyone is making trillions in profits - the global industry is only predicted to reach US$60 billion by 2025.
We're keen to keep as much processing in Tairawhiti as possible - that's where value is added and jobs created. Because it is such a high-value product the transport and distribution costs are a much smaller proportion of the product price than compared to lower value commodities like wool, logs or milk. Consuming the plant material has its advantages for some people, there is some good science around the benefits of what is known as the 'entourage effect' where the cannabinoids, terpenes and more volatile compounds interact synergistically to increase the bioavailability and efficacy of the respective molecules. Our products will aim to retain this whole plant effect rather than trying to isolate one target molecule, as is common in most pharmaceutical drugs. Some people (doctors and patients) want certainty about what is being used as medicine - they want products that are proven to be safe, consistent and predictable in the effects they will have on the person consuming the medicine - that's why we're investing in clinical trials and will make our product available to medical researchers around the world to test in a wide range of contexts on a wide range of health conditions.
Pharmac doesn't subsidise any medical cannabis products yet, so you don't need to worry about those precious dollars being diverted from synthetic drugs that are the products owned by big pharmaceutical companies.

Mary-Ann de Kort - 9 months ago
Thank you for clarifying that Manu.

John Fricker - 9 months ago
Gisborne deathline
Once this scheme is up and running and Mr Caddie is a millionaire drug baron, the next phase will be cocaine and opium production.
Three cheers for the left-wing progressives for leading us into this brave new world of drug cartels and gang warfare.

wasnt me..... - 9 months ago
Umm . . . who looks after that lot at night?

Homer - 9 months ago
Wasn't me obviously thinks he/she is an anonymous contributor. I've seen your number plate being driven erratically and illegally around town! Maybe you're not quite as smart as you think you are. Too many drugs? D'oh!

Conrad, Auckland - 9 months ago
One fart and that 160 million's gone - that's peanut money

Poll

  • Voting please wait...
    Your vote has been cast. Reloading page...
    Do you think that schools 'poaching' rugby players by offering them scholarships is OK?