In an industry first for Aotearoa New Zealand, Cannasouth Limited (NZX:CBD) has exported its inaugural commercial shipment of cannabis-based active pharmaceutical ingredients (API) to Australia.
Cannasouth CEO Mark Lucas stated that this initial shipment marks a significant milestone for the domestic industry, highlighting the international demand for high-quality, PIC/s Good Manufacturing Practice (GMP)-certified pharmaceutical ingredients. “We believe this is the first export of its kind from Aotearoa: a high-purity, cannabis-based API, manufactured in New Zealand to GMP standards and verified by the Medicinal Cannabis Agency. This sets the stage for the next phase of growth for Cannasouth and the industry.”
“Following our first commercial export of cannabis flower to Australia in June, we’re now making significant strides in the Australian medicinal cannabis market by expanding our product offering with the supply of high purity, verified pharmaceutical CBD ingredients,” Lucas added.
“Our New Zealand-manufactured API differs from flower exports. Currently, exported flower serves as a starting material that requires additional processing steps abroad. To be used in oral dosage forms like oils, the cannabinoids in the flower must be extracted and purified.
“In contrast, a GMP-certified API can be immediately used as a key ingredient in medicinal cannabis products.”
“The upcoming improvements in the medicinal cannabis scheme, expected by the end of 2023, will further enable us to export at scale and expedite our mission to provide high-quality, affordable medicinal cannabis products to New Zealand patients. This is timely, given that both of our manufacturing facilities have now achieved GMP status.”
The distribution agreement with Australian pharmaceutical company Novachem Pty Ltd allows for the distribution of Cannasouth’s API and finished products to Australian manufacturers, pharmacies, and patients.
Andrew Heath, Novachem’s Manager of Cannabis Products, commented, “We’re excited to introduce Eqalis’ products to Australian pharmacies and patients. Eqalis’ commitment to quality and GMP aligns with New Zealand’s stringent quality guidelines, paving the way for significant market opportunities not just in Australia, but globally.”
On June 1, 2023, Cannasouth merged with Eqalis Group, enabling end-to-end operations with GMP approval for producing dried cannabis flower and manufacturing cannabis-based ingredients and medicinal cannabis products, including oral solutions.
Cannasouth Limited (NZX:CBD) is pleased to share forthcoming regulatory changes that are poised to have a significant impact on Cannasouth’s growth trajectory and our industry competitiveness. The Medicinal Cannabis Agency has obtained approval for a series of modifications to the Misuse of Drugs (Medicinal Cannabis) Regulations 2019.
Key Highlights Include:
- Facilitation of Exports: Changing the quality requirements for exports will make it easier for New Zealand companies, like ours, to penetrate international markets.
- Expansion of Medicinal Cannabis Categories: Broadening the definitions to cover a more extensive variety of plant forms.
- Enhancement in Research Capabilities: The new amendments will enable non-therapeutic research involving cannabis plant material or products obtained from the Medicinal Cannabis Scheme or the Industrial Hemp Framework.
These primary changes are complemented by various technical enhancements to streamline the Scheme’s compliance prerequisites without jeopardising product quality.
Mark Lucas, CEO of Cannasouth, says
“We have eagerly anticipated these changes, working in consultation with both the New Zealand Medicinal Cannabis Council and Medicinal Cannabis Agency. Beyond the major regulatory shifts, there are numerous smaller adjustments expected to be implemented. When considered collectively, these refinements have the potential to materially influence the scheme in a positive manner.
“By facilitating better access to export markets and reducing bureaucratic overheads, we can harness economies of scale. This not only strengthens Cannasouth’s position but also translates to reduced costs for New Zealand patients, aligning with our commitment to making medicinal cannabis more affordable and accessible.”
It is worth noting that these regulatory amendments will not influence the current prescribing methods for medicinal cannabis. The overarching intent of these changes is to ensure the long-term sustainability of the medicinal cannabis sector while maintaining the quality of products to patients.
Public consultations will be initiated on relevant materials that will be incorporated by reference into the Regulations. Post-consultation, the drafting of amendment regulations will commence, with the objective of enacting them by the end of 2023.
For a detailed overview of the changes, please refer to the official communication from the Medicinal Cannabis Agency on the Ministry of Health website.
Mr Lucas says, “We believe that these changes will streamline our operational processes, reduce costs, and enable us to seize new market opportunities. Cannasouth remains committed to leveraging these regulatory improvements to deliver enhanced shareholder value.”
Cannasouth Limited (NZX:CBD) is pleased to announce it has received its Licence to Manufacture Medicines to produce dried cannabis flower (to the globally recognised GMP standard) at its cultivation facility.
To obtain this licence, Cannasouth had to demonstrate compliance with the New Zealand Code of Good Manufacturing Practice (GMP) for Manufacture and Distribution of Therapeutic Goods.
GMP is the highest quality standard possible. CEO Mark Lucas says, “Achieving the globally recognised GMP standard for our commercial scale facility opens doors to high-value markets worldwide, while also enabling us to launch products in New Zealand.
“We are seeing exponential growth in demand for GMP flower in Australia and Europe with no signs of slowing down and a similar trend in New Zealand is quickly developing. This validates our strategy to invest in this area.
“Receiving this Licence to Manufacture Medicines is the culmination of a multi-year process. It creates a competitive advantage for Cannasouth because it enables us to produce our medicinal cannabis products in-house without relying on third-party manufacturing steps.”
Cannasouth’s GMP Licence to Manufacture Medicines covers all post-harvest activities and is additional to the Good Agricultural and Collection Practice (GACP) quality standard previously achieved.
Cannasouth shareholders recently approved the proposed merger with Bay of Plenty-based Eqalis. On completion of the merger Cannasouth will operate with end-to-end GMP approval to produce dried cannabis flower, through to the manufacture of cannabis-based ingredients and medicinal cannabis products, including oral solutions.
Now that a Licence to Manufacture Medicines has been obtained Cannasouth will commence the process of verifying flower products for the New Zealand market, creating more competition to benefit New Zealand patients.
Mr Lucas says, “This is a major achievement, and I would like to thank our people for making this happen and our shareholders for their support along the way.”
Today Cannasouth announced a binding agreement to advance a potential 50:50 merger with leading medicinal cannabis company Eqalis.
Cannasouth and Eqalis will come together to deliver better outcomes for patients – both locally and globally – by combining IP, technology, research and development, innovation, manufacturing, sales and prescribing capabilities.
Mark Lucas, Cannasouth CEO, says the merger will create a more resilient business, building towards diversified income streams, higher margins and access to a larger capital pool to help the company compete globally.
“Both Cannasouth and Eqalis share the same values when it comes to delivering positive health outcomes to patients. Through collaboration, we can speed up the advancement of technology to bring medicines to market faster,” says Lucas.
“Together, Cannasouth and Eqalis will have greater ability to lead and shape the New Zealand industry and reduce costs to patients.”
Greg Misson, Eqalis CEO, says this partnership will ultimately lead to better health outcomes for patients across Aotearoa through innovation and world leading technologies.
“Cannasouth and Eqalis will jointly undertake capital raising activities to bring approximately $9 million of new capital into the business to accelerate growth and the advancement of technologies which will bring costs down for patients.
“We know the most significant barrier to medicinal cannabis for many Kiwis is affordability. As a combined entity, we’re investing in diversification and eliminating duplication to lower the price of medicinal cannabis for patients,” says Misson.
The cannabis medicines produced by the new merged company will range from simple oil-based tinctures to next generation pharmaceuticals, supported by industry-leading cultivation and production technology.
“We know there’s huge demand in Aotearoa to provide high quality, affordable medicinal cannabis products to the thousands of Kiwis suffering from chronic pain, insomnia and anxiety,” says Misson.
“By improving the speed and quality of our production, we’re able to pass these savings along to patients through reduced cost, which is why the R&D side of our industry is so important.”
Principal terms of Cannasouth and Eqalis prospective merger
- The transaction is to be structured as the purchase by Cannasouth of 100% of the shares on issue in Eqalis (“Eqalis Shares”) from the Eqalis shareholders.
- The value attributable to the Eqalis Shares has been notionally set at $48.8 million.
- The notional sum of $48.8 million will be satisfied by Cannasouth issuing 147,891,069 new ordinary fully paid Cannasouth shares at an issue price of $0.33 per share to the Eqalis shareholders.
- Cannasouth CEO Mark Lucas will continue as Chief Executive of Cannasouth post completion of the merger.
- Eqalis CEO Greg Misson will be appointed Chief Innovation Officer of Cannasouth post completion of the merger.
For more information about this agreement, please click here to view the NZX MAP announcement.
To view the Cannasouth and Eqalis proposed merger fact sheet please click here.
Cannasouth Limited (NZX:CBD) is pleased to announce that its subsidiary, Cannasouth Cultivation Limited, has today received it’s Good Agricultural and Collection Practice (GACP) certification for its controlled environment agriculture sealed greenhouse facility based in Waikato.
CEO Mark Lucas says “Achieving GACP certification is a credit to our cultivation and quality teams which have been working towards this since commissioning in November 2021.”
The certifier is global organisation Control Union, which conducted an audit of the facility during its first commercial harvest in June 2022.
Control Union Medical Cannabis Standard GAP (CUMCS-GAP) is the globally leading certification standard for medical cannabis. The goal of the standard is to ensure the best quality and consistency in the production of the product.
The scope of CUMCS-GAP covers medical Cannabis propagation and cultivation and is fully compliant with both the World Health Organisation (WHO) and European Medicine Agency (EMA) GACP guidelines. Certified organisations receive both CUMCS-GAP certificate and GACP compliance certificate for both the WHO as well as EMA GACP guidelines.
GACP certification is required by many countries for the import of bulk cannabis flower to be used as a start material for further processing.
Cannasouth’s cultivation and post-harvest facility is one of only a few of its type that has been specifically designed to operate with two quality standards. GACP, which covers the propagation and cultivation activities, and Good Manufacturing Practices (GMP), which covers the post-harvest, drying and packing processes. This is an important distinction because for higher value premium flower to be used as a finished product requires GMP certification for certain post-harvest activities in most jurisdictions, including New Zealand.
Mr Lucas says “GACP certification is a critical first step for both our exports and local sales of premium cannabis flower – it allows us to export bulk flower for use in further manufacturing, including extraction.
“Our next step is achieving the higher pharmaceutical quality standard of GMP certification for our post-harvest processes. GMP will allow us to produce flower as the finished product for both export and the New Zealand markets. This supports the recent multi-year supplier agreement we recently reached with our German customer”.
Cannasouth’s GMP audit is scheduled for September 2022.
Cannasouth CEO Mark Lucas presented at the NZX virtual investor event on 10th August 2022.
A three-year neuropathic pain (pre-clinical) study by Cannasouth has confirmed that cannabinoids from medicinal cannabis could be effective at reducing debilitating neuropathic pain, which affects about 400,000 New Zealanders or 8 percent of the country’s population.
The study to understand the potential of cannabis as an alternative therapeutic to treat neuropathic pain is the first of its kind in New Zealand. It is part of Cannasouth’s science-led programme of commercially focused research aimed at developing next-generation medicinal cannabis products and valuable IP.
Neuropathic pain generally results from physical damage, infection, and disorders such as diabetes. It is caused by damage or injury to the nerves that transfer information between the brain and spinal cord from the skin, muscles, and other parts of the body. The pain is usually described as a burning sensation and affected areas are often overly sensitive to the touch (allodynia) and has a significant adverse impact on quality of life.
Cannasouth Chief Scientific Officer David Gill says neuropathic pain is currently poorly managed by the traditional first-line treatment options available in New Zealand.
“These options include anti-convulsant drugs, such as gabapentin or antidepressants. However, both these medicines have the potential to cause significant drug interactions or have adverse effects on patients, including sedation and addiction.
“Cannabinoids could provide a much-needed alternative treatment option for doctors and patients. The data from our research clearly demonstrates the comparable efficacy of cannabinoids to gabapentin.”
David says the investigational phase of this study has provided Cannasouth with significantly more understanding and intellectual property in a critically important area of neuroscience. He believes sharing this knowledge will benefit Cannasouth, doctors and patients alike.
“By releasing some of our findings, we want to bring doctors and patients along with us on this journey of discovery. We want to share exciting milestones like this with them and give them confidence that medicinal cannabis could be a viable treatment option for neuropathic pain.
“The implications of these findings are significant. There is real potential for this research to help us develop advanced cannabinoid therapeutic products ready for human efficacy and drug delivery-controlled trials.
“It means we are one step closer to developing medicines that could potentially improve the quality of life of hundreds of thousands of New Zealanders.”
Cannasouth is now in the process of seeking a partner to progress the clinical development of these medicines.
The research was co-funded by Callaghan Innovation and led by Prof. Brett Langley and Marion McKinnon (PhD candidate) at The University of Waikato. Ms. McKinnon will be presenting the research findings at the Australasian Winter Conference on Brain Research in Queenstown on 28-30 August 2022.
The Research & Findings
The research determined the efficacy of cannabinoids in alleviating symptoms in a pre-clinical model for distal to proximal peripheral neuropathy and neuropathic pain (Charcot-Marie-Tooth disease type 2A (CMT2A)).
As part of the research, a dosing study was conducted using oral Cannabinoid formulations (cannabidiol and tetrahydrocannabinol) using placebo and a positive control, gabapentin at clinically relevant dose.
Post-administration testing was used to assess mechanical allodynia and thermal hyperalgesia. Cannabinoid efficacy was comparable to gabapentin following single and multiple doses, with an observable faster onset of action in the first 4 hours. No effect was noted for the placebo formulation.
The study indicated a clear strategy for CBD and THC doses which provided greatest improvement in pain symptoms. The dose equaled gabapentin for efficacy in improving thermal hyperalgesia across eight hours of testing.
The pre-clinical efficacy also indicates further investigation is warranted into cannabis compounds for the treatment of neuropathic pain symptoms.
Cannasouth CEO Mark Lucas was invited to participate in an interview with Frances Cook, as part of the Sharesies “Shared Lunch” podcast series.
You can view the full interview here:
Cannasouth has today signed a supplier agreement with WEECO Pharma GmbH based in Germany for the supply of cannabis flower from New Zealand into Europe.
The total value of the agreement could be worth between NZ$12 million and NZ$15 million over years two and three.
WEECO is one of the leading importers of medicinal cannabis in Germany. Under individual cultivar supply agreements to be negotiated, cannabis flower will be supplied to WEECO from Cannasouth’s world-class cannabis cultivation and processing facility based in Waikato, New Zealand.
Cannasouth CEO Mark Lucas says Cannasouth will benefit from the opportunity this agreement brings while it ramps up production and completes its Good Agricultural & Collection Practices (GACP) certification, which is expected soon.
“Good Manufacturing Practice (GMP) certification is next to complete and is necessary for higher-value flower sales. Accessing the European market also requires suitable genetics.
“Our agreement with WEECO means Cannasouth can now confidently move forward with our growing programme and begin the next phase of our cultivar on-boarding and development.”
Exporting medicinal cannabis flower has always been part of Cannasouth’s strategy for generating additional revenue streams, while it develops its own medicinal cannabis products for the New Zealand market.
“Global demand, particularly in Europe, has created an early revenue opportunity in the export of premium cannabis flower,” says Mark. “Our world-class, next-generation cannabis cultivation and processing facility was fully commissioned at the end of last year. This has enabled us to take advantage of the rapidly growing and lucrative pharmaceutical cannabis flower market.
“We have taken our time to select the best partner in Europe to represent Cannasouth and deliver our flower to one of the fastest-growing medicinal cannabis markets in the world.
“Despite global geopolitical and economic uncertainty, the medicinal cannabis industry continues to grow rapidly as patients worldwide seek alternatives to currently available treatments.
“We are thrilled to partner with WEECO and be a key part of their global network and growth plans. We have built a world class team and world-class cultivation facility here in New Zealand. These strong foundations are now enabling us to reap the rewards of our efforts and participate as a key player on the international stage.”
CEO of WEECO Pharma GmbH Börge Diessel says, “We are incredibly excited to be starting our partnership with Cannasouth. After a long vetting and qualification process, we are now able to add the top New Zealand supplier to our group of selected producers and genetics collaborators.
“Our customers will benefit from Cannasouth’s excellent quality produced in its state-of-the-art facility. We will develop products together that will enable clear advances to be made in the treatment of various illnesses and thus offer patients a better quality of life.”
Cannasouth’s agreement with WEECO is for a three-year term. Under the agreement WEECO has the right of first refusal for each new cultivar developed by Cannasouth.
Cannasouth and WEECO have also agreed to work together to develop cannabis cultivars to best suit the needs of the European market.
Cannasouth will retain sufficient flower to supply the local New Zealand market, which will enable its medicinal cannabis products to be verified. This flower is expected to be a popular form of medicinal cannabis with New Zealand patients.
For more information about this agreement, please click here to view the NZX MAP announcement.
We recently completed the first commercial harvest from our hybrid, controlled environment cultivation facility. This was a major milestone for us and marked the end of the first full growing cycle at our rural Waikato site.
Over the course of the harvest, we hosted several guests and journalists eager to share our story, we also produced our own video to mark the occasion. These videos are compiled below:
Lucas De Jong from Seven Sharp (TVNZ1) produced this video of the harvest.
We also hosted journalist Rachel Moore from Stuff, who wrote this article.
Finally, here’s a video we produced in-house of CEO Mark Lucas, updating our followers about the significance of this event.
Year-round cultivation activities are now in progress at our custom-built facility, with the next batch of medicinal cannabis plants ready to be transplanted, once a deep clean and routine maintenance has been completed.
The harvest was a team effort, with internal staff helping. This was an important aspect of the harvest, not only giving all staff the opportunity to gain a good understanding of the product, but also for validating our processes before completing GACP (Good Agricultural and Collection Practices) audits.
Harvesting approximately 500 mature cannabis plants is no small feat, a special thanks to all our helpers (both internal and external), our team at Cannasouth Cultivation Limited for being wonderful hosts and accommodating our guests, and for caring for this crop right through to harvest.
The harvested flower will now dry in purpose-built drying rooms, until it is at optimum moisture levels, before being trimmed, packaged, and stored ready for sale.
Successful assessment by the Medicinal Cannabis Agency of Cannasouth’s first medicinal cannabis products will deliver wider treatment options to New Zealand patients and prescribers.
Cannasouth has had three products successfully verified by the Government’s Medicinal Cannabis Agency (Agency).
Cannasouth CEO Mark Lucas says our products differ from other medicinal cannabis products on the New Zealand market because they contain different ratios of cannabinoids.
“The differentiated formulations of our products will provide New Zealand patients and prescribers with new treatment options compared to existing products on the New Zealand market. At the moment products available offer very few differences in formulation. We are confident these products offer patients and prescribers a point of difference to meet the treatment needs of a wider range of conditions.
“Full-spectrum extracts contain complex mixtures of cannabinoids. While the technical challenges from this did result in us navigating a lengthy regulatory pathway, the wait is worthwhile because of the benefit patients will receive from these enhanced product options.”
In making the announcement, Mr Lucas reinforced the complex nature of the medicinal cannabis industry and acknowledged the hard work of Cannasouth’s skilled and experienced team.
“These product approvals are another sign that the industry is maturing, which will ultimately benefit those who need these medicines most.
“Patients have been desperately waiting for high-quality and competitively priced new cannabis-based medicines to become available under the Medicinal Cannabis scheme. Now we are one step closer towards making more medicinal cannabis options available and giving prescribers and patients more choice for treating a variety of medical conditions.”
Suzanne Burge and Jack Lee are founders of PillDrop, a leading NZ online pharmacy and medicinal cannabis dispensary. Pharmacist Mr Lee says “These products have a unique combination of cannabinoids. It is great to see new products verified with a point of difference to meet the treatment needs of a wider range of patient conditions. We are seeing strong growth in demand for medicinal cannabis products”
Agency approval of these products is also a major step forward for Cannasouth in terms of generating medicinal cannabis revenue. Revenue generation from the sale of medicines in New Zealand, in addition to high-quality dried flower biomass, is one of the company’s key goals for 2022.
This will complement Cannasouth’s existing non-cannabinoid revenues generated through its subsidiary Midwest Pharmaceutics NZ Ltd, which sells products and services to the pharmaceutical, health, and wellness supplement sectors.
Cannasouth is also close to harvesting its first commercial crop of medicinal cannabis flower at its controlled environment agriculture (CEA) cultivation facility in the Waikato, while progressing GACP and GMP certification.
A list of all medicinal cannabis products that meet the New Zealand minimum quality standard can be found here: Medicinal cannabis products that meet the minimum quality standard
Our most recent newsletter features our 2021 annual report and also has an exciting update from inside our sealed, controlled environment greenhouse and cultivation facility.