Medicinal cannabis company's investment round crashes crowdfunding site

Thursday, 10 May 2018

Hikurangi Hemp wants to be one of the first producers of medicinal marijuana in New Zealand.

A medicinal cannabis company raised $2 million from the public after overwhelming interest crashed crowdfunding website PledgeMe.

It received another $1.4m in registered interest.

Hikurangi's campaign was due to launch on Tuesday evening, but a large number of people flocking to PledgeMe caused its new cloud server to fail before the offer opened.

That blocked the public from investing in Hikurangi's investment company, Waiapu Investments.

The offer reopened again on Wednesday. More than 3000 people signed up for shares in the company. The minimum investment amount was $50 and the cap of $2m was reached within 17 minutes.

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Hikurangi Enterprises has a Ministry of Health-issued licence to grow hemp on private land in Ruatoria, near Gisborne.

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Hikurangi Enterprises wants to raise $1 million from the public to fund clinical trials of medicinal cannabis.

Hopeful investors reported the campaign crashed again on Wednesday, barring them from buying shares.

The campaign closed on Thursday morning, after raising a total of $2m.

PledgeMe chief executive Anna Guenther publicly apologised for the system failure.

Waiapu Investments director Panapa Ehau says Hikurangi Enterprises is humbled by the overwhelming investment interest it's received.

The platform recently upgraded to cloud server Amazon Web Services to handle larger campaigns like Hikurangi's, she said.

'We thought scaling servers wouldn't be a problem. We were wrong.'

On Tuesday evening, Guenther said PledgeMe's server was fixed and ready for Hikurangi to reopen its campaign on Wednesday night. However, the website failed again on Wednesday.

Waiapu Investments director Panapa Ehau said the company was humbled by the support it had received.

Hikurangi closed its first investment round, from locals, earlier this week. It said it raised $1.4m, which was included as part of the $2m total.

The private round offered $1 shares to community members in the East Coast region, where its hemp plantation is based.

PledgeMe chief executive Anna Guenther apologised for the platform's new system failure.

The company planned to raise $2m from its crowdfunding campaign, and another $4m from institutional investors, to build a pharmaceutical-grade processing facility and to upscale plant growing operations in Ruatoria.

Investment would also be used to fund clinical trials of medicinal cannabis.

Cannabis use for any reason, other than as an imported medicine with Ministry of Health approval, is illegal in New Zealand.

Hikurangi has one of three Ministry of Health licences to grow cannabis for research and development.

A bill to legalise its use for medicinal reasons was debated by the Health Select Committee, and will be read in Parliament for the second time this year.

An earlier version of this story incorrectly said Hikurangi had raised a total of $3.6m.