Pure Cann New Zealand, which counts former Air New Zealand boss Rob Fyfe as its executive chair, has secured $6 million from Australia's Cann Group for a 20 per cent stake in the local medicinal cannabis company.
The investment will be made over stages with the initial 10 per cent to be completed on or before August 30 and a further 10 per cent when New Zealand regulations come into force and Pure Cann's board approves the construction of its commercial cultivation facility.
The New Zealand government anticipates introducing new regulations, licensing requirements and quality standards governing medicinal cannabis usage by the end of this calendar year.
ASX-listed Cann Group has the option to increase its position to 30 per cent.
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Fyfe, currently Pure Cann's second largest shareholder with a 25.2 per cent stake, said the move is a "pivotal moment for New Zealand's medicinal cannabis industry."
The strategic investment and a technical services agreement - which allows for mutual sharing of intellectual property - "ensure that Pure Cann is now fully funded and, more importantly, allows us to leverage the cultivation, production and technical leadership of Cann Group," the former Icebreaker chair said.
The move lets the two companies work together to "capitalise on the growing demand for medicinal cannabis in New Zealand and explore potential export opportunities as Pure Cann develops its own proposed cultivation and production facilities," said Cann Group chief executive Peter Crock.
Cann Group has established research and cultivation facilities in Melbourne and is looking to provide access to medicinal cannabis for Australian patients. Aurora Cannabis, one of Canada's largest listed medicinal cannabis companies, owns 22.9 per cent of the Australian firm.
"Pure Cann is proposing to develop a range of organic medicinal cannabis products to serve patient needs in New Zealand and potential export markets," Crock said.
"We are confident that Pure Cann will be able to leverage New Zealand's global reputation for development world leading premium and natural products."