Greenfern Industries has reached an agreement with Australian-based Cannvalate Pty which will assist Greenfern (GFI) to develop its cannabis medicine sales in Australia, which are marketed under the GFI Pharma brand.
GFI chairman Brent King said the transaction includes the issuance of shares in Taranaki-based Greenfern to a value of NZD $900,000. GFI and Cannvalate will now move to finalise an agreement, which is compliant with Australian and New Zealand law and NZX listing rules.
Cannvalate has agreed to continue to range of GFI Pharma-branded medications and, under the terms of the agreement, they will educate physicians with the intention of securing exposure to 6000 patients. The agreement also means that GFI will have access to anonymised patient data which will contribute to the company’s research and development initiatives so it can develop and refine specific medications based on real world patient experiences.
“This is a fantastic opportunity for Greenfern to strengthen its business in Australia,” King said.
“When we listed on 21 October 2021 we did not expect to have the opportunity available to us. We have been working closely with the directors of Cannvalate Dr Sud Agrawal and Darryl Davies, who is a director of both Cannvalate and Greenfern. We see that this relationship can bear significant advantage for both parties and we are hoping to develop it further over time. The New Zealand industry is behind the Australian industry, but it is moving forward quickly. Learning from the Australian experience will fast track the development of Greenfern. This is a fantastic start to the new year.”
GFI managing director Dan Casey said these types of deals are hard to find.
“Both pre- and post-listing we have been approached from a number of interested parties who are attracted by Greenfern’s business base and who are seeking to become involved with us. Most of the businesses have some value for us but generally they are early stage and building them will require an investment of both time and capital. This investment stood out because of the immediate cash flow and the quality of the counter party, Cannvalate. We are selling product under the GFI Pharma brand every week currently; our challenge is to to increase the volume. This transaction assists in this significantly.”
Casey said GFI is also working on developing more medications.
“This will increase our product lines and it will appeal to a wider range of patients. The relationship with Cannvalate dramatically accelerates our plans and we would not have been able to get to this stage for at least 18 months if we were to attempt this rapid growth independently.
“With our experience of selling the product in Australia it will allow us to work through the process of getting the medicines approved in New Zealand. The medical data is being accumulated every day and we are considering the next stage. When we have made the decision on whether to go through the New Zealand approval process, we will advise the market.
“On a personal basis the senior management, head of growth John Hussey and I have been very surprised how well the listing has gone. Share prices will go up and down and we understand that over time they will reflect the performance of the company so the only thing we can focus on is making the company more valuable. We will continue the work on the company’s power station and cannabis cultivation facility at Normanby. This year’s hemp has been planted and it is growing well in Normanby.”
Casey said that GFI, as an entrepreneurial company, will continue to assess opportunities and invest when projects meet the company’s projected risk/return thresholds.
“It is an exciting time to be in the cannabis sector in New Zealand, Australia and beyond,” Casey said.
“We expect to see significant developments in the sector on both sides of the Tasman this year.”