Future hopes are bright in an East Coast town after a local company was granted a medicinal cannabis licence - the country's first of its kind.

Ruatoria-based company Hikurangi Cannabis has been issued a licence by the Ministry of Health, enabling it to breed cannabis strains that could be used in medicines.

Co-founder Manu Caddie said it was an important milestone for the company, which began researching opportunities in the industry in 2016 as a means to provide new economic opportunities in the region.

"Being able to execute our business and community goal of building a pharmaceuticals industry at Ruatoria is a significant milestone for us all," Caddie said.

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"We are excited to be able to base this new industry in our community, a rural region that desperately needs new economic development opportunities. Without the strong local support believing in this goal it would not have been possible."

The process has involved a huge community effort over the past few years, Hikurangi Cannabis co-founder Manu Caddie says. Photo / Supplied
The process has involved a huge community effort over the past few years, Hikurangi Cannabis co-founder Manu Caddie says. Photo / Supplied

Hikurangi Cannabis is the second organisation to obtain such a licence from the ministry, with the other going to a university for research into medicinal cannabis products.

The licence was for research purposes only, as it was still illegal to produce medicinal cannabis for sale in New Zealand.

Caddie said the Government's medicinal cannabis bill proposed to change this, with that legislation likely to pass in October.

Earlier this year more than 1500 local families and other New Zealanders invested $2.5m through a crowdfunding campaign, providing the foundation for negotiations with institutional investors keen to bring larger investments to the business.

The company also had a conditional agreement to supply Seattle-based Rhizo Sciences with $160 million worth of products over the next three years.

Obtaining the licence triggered a series of transactions for the company to access funds raised over the past six months from New Zealand investors, Caddie said.

"We're aiming to provide safe and affordable medical cannabis products to New Zealanders next year," Caddie said.

"Exports allow us to build the infrastructure to produce affordable medicines made to Ministry of Health standards.

"It is encouraging to hear the politicians and officials supporting the need to get New Zealand-made medicines to New Zealanders as quickly as possible."

The company hopes the industry will provide new areas of economic development on the East Coast. Photo / Supplied
The company hopes the industry will provide new areas of economic development on the East Coast. Photo / Supplied

They were initially looking at two products, an oral syringe and a topical balm that could be rubbed onto painful areas, particularly for those with arthritis.

Imported products like Sativex cost as much as $1000 per month.

Caddie said they were hoping their products would be half that price.

The company would start building high-tech greenhouses and processing facilities near Ruatoria on the East Coast.

While the Ruatoria facilities were being built, the company would import more affordable products so they are available to people who need them sooner.

It had commissioned clinical trials to start next year for the first New Zealand-made cannabis medicines.