Medicinal cannabis, the latest craze to hit North American stock markets, may soon be a feature of the NZX if Waikato-based Cannasouth's listing plans come to pass.
Cannasouth said it will make an application to list its shares on the NZX main board through an initial public offering (IPO) during the second quarter of 2019.
The company, founded by businessmen "with a scientific bent" - Mark Lucas and Nicholas Foreman - has received a licence from the Ministry of Health to carry out medicinal cannabis research in New Zealand. The licence also enables the company to apply to import cannabis products for research.
The licence represents a milestone for Cannasouth, whose management team has been involved in the cultivation and research of industrial hemp, and now medicinal cannabis, since 2002.
Lucas, who is the company's director of operations, says the company's IPO will open doors for future research into the development of advanced cannabinoid medicines and health-related products.
Details of the structure of the IPO, and how much money it aims to raise, have yet to be finalised, but it is expected to culminate in a full retail offer some time towards the end of the first quarter or the beginning of the second, next year.
Lucas said the public would be familiar with images of people smoking cannabis to offset the side effects of chemotherapy, but he said the medicinal cannabis was "a lot more complex than people think".
"Because cannabis has been illegal, very little research has been done on it over the last 30, 40 or 50 years, so it's created a vacuum," Lucas told the Herald.
"All of a sudden, these properties have been discovered - certainly in relation to treating epilepsy," he said.
Research around the world was quickly advancing as to other properties in cannabis that might be useful.
"It's a complex plant and it has suffered from dogma and stigma for a long time," Lucas said. "We have seen society look at it in a different way. It's obviously very political and we are aware of that."
Cannasouth is planning the construction cultivation and production facilities in Waikato, in anticipation of legislation changes that will allow the manufacture and sale of medicinal cannabis in New Zealand.
The company secured a first round of capital investment from the CMP Growth Capital Fund, a fund aimed at provides growth capital to emerging New Zealand businesses.
Another modest pre-IPO round of capital raising will be undertaken before the end of this year.
Sean Joyce, principal of CM Partners, which manages the CMP Growth Capital Fund, said Cannasouth had all of the intellectual capital and attributes needed to be a leader in the medicinal cannabis industry.
It's a complex plant an it has suffered from dogma and stigma for a long time.
Cannasouth is chaired by Australia-based director Tony Ho. He will be joined by former Federated Farmers chief and experienced director Conor English - brother of former Prime Minister Bill English.
The board will be supported by a scientific and medical advisory board which includes Emeritus Professor Alistair Wilkins from the University of Waikato.
Lucas, alongside director of research, Foreman, received funding in 2016 from the Agricultural and Marketing Research and Development Trust and Callaghan Innovation to undertake research projects with the University of Waikato.
Cannasouth's focus is on furthering medicinal cannabinoid research, specifically the extraction and refining of cannabidiols (CBD) - a non-psychoactive compound in cannabis that has been associated with managing a range of medical conditions, including cancer-related symptoms and neurological disorders such as epilepsy and multiple sclerosis.
Medical cannabis companies have captured investor attention in North America to the extent that it's been compared to the bitcoin phenomenon.
In July Canada-based marijuana production and processor Tilray became the first company of its kind to debut on Nasdaq Inc.'s Global Select Market exchange.
The shares were issued at US$17 ($25.77), then rallied to US$214 a share, before settling back to US$152 a share.