The seemingly endless money flow appears to be drying up for the New Zealand medical cannabis industry as the tough regulatory environment stretches timeframes and tests investor patience.
On Monday, publicly listed Taranaki medical cannabis company Greenfern closed out a capital raise with $1.74 million of the $5m it had the ability to raise, with the proceeds to go towards working capital requirements and expanding its cultivation facility as it worked towards meaningful revenue.
Similarly, its listed peer Cannasouth closed out a raise in September with $3.2m of the $4.1m it had sought. Both companies have been burning through cash quickly and relying on capital raises to fund the necessary work to get their products to patients and begin making money.
The turnouts are a far shot from the fanfare and investor support when medical cannabis first hit New Zealand’s stock exchange in 2019, with Greenfern’s chief executive acknowledging investors had to be much more patient than expected with unprecedented regulatory hurdles.
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