Cannasouth Cannabis Society Loses 20% of Starts

The Cannasouth medical cannabis research company's shares fell by 20% at the start of trading.

The Waikato-based company raised $ 10 million at a price of 50 cents a share, half a priority offer and half an oversubscribed initial public offering. It opened at 51 cents when listing today, but has since dropped to 40 cents. About 522,000 of the 102 million shares of the company have changed hands today.

Cannasouth is the first initial public offering on the New Zealand market for two years.

Chief Executive Officer Mark Lucas said the offer was attracting "very strong" interest from a wide range of investors.

Cannasouth registered its product disclosure statement in mid-May, revealing its intention to raise up to $ 10 million in new shares. The offer included a priority offer of $ 5 million and a general offer, also of $ 5 million.

Cannasouth plans to use the money for research and development, a new commercial processing facility, more staff and increase its working capital, as well as to pay the floating NZX.

The company does not have revenues or financial forecasts, but praises its ability to obtain licenses and build strong relationships with regulators.

Lucas said the offer attracted a lot of interest from a wide range of some 1,400 New Zealand investors.

After the show, Lucas and co-founder Nic Foreman will see their holdings fall from 27.4% to 27.6% each before the show.

Cannasouth, in its bid documents, warned that there may be delays in the development of the new framework, or that the medical conditions for which medical cannabis could be prescribed could be so narrow that They would not promote the profitability of the many companies operating in the sector.

"Cannasouth's business model and future revenues depend on the implementation of legislation and regulations, including, but not limited to, the medicinal cannabis control program that will allow Cannasouth to implement its business plans, "says the report.

– with desk