Rua Bioscience lists on the NZX main board, share price up 40pc within hour

Thursday, 22 October 2020

Rua Bioscience board representatives ring the NZX bell to mark the medicinal cannabis company's listing on the New Zealand stock exchange. From left are company directors Brett Gamble, Martin Smith and Anna Stove with chairman Trevor Burt.

Rua Bioscience has become the second medicinal cannabis company to list on the New Zealand stock exchange after raising $20 million in its initial public offering this week.

The company offered 40 million shares, at 50 cents a share.

Within an hour of becoming public, the company’s share price rose 40 per cent to 70c.

Rua Bioscience held a joint listing event with its board of directors and chairman in Auckland and the co-founders, Manu Caddie and Panapa Ehau, and chief executive Rob Mitchell in Ruatoria on the East Coast north of Gisborne.

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Rua Bioscience plans to leverage New Zealand’s clean, green, international brand to differentiate itself from competitors overseas.

Chairman Trevor Burt said Covid-19 had delayed its plans to list, but Rua Bioscience was the first new NZX listing since Napier Port in August last year.

Rua Bioscience co-founder Manu Caddie said the company’s aim is to grow its local economy and provide jobs in Ruatoria.

Rua Bioscience received its commercial licence to grow and supply cannabis-derived pharmaceuticals in August.

Burt said the company’s primary market would be Germany, and it would apply for the European Union’s good manufacturing practice (GMP) certification, a standard all pharmaceutical manufacturers must meet in their production process, in November to sell to the country.

“Once we get that we can sell product into the German market.”

Caddie said the company’s aim was to grow its local economy and provide jobs in Ruatoria.

Rua Bioscience chairman Trevor Burt says the outcome of the recreational cannabis referendum will not affect the medicinal cannabis company which plans to sell medicines to Germany.

The company wanted to create 100 jobs within the community over the next two years, Caddie said.

Burt said the result of the recreational cannabis referendum would not have any impact on the business as its focus was on exports.

“We're not looking at recreational at all. We're very clear that it is about medicinal cannabis. The referendum raises the agenda about cannabis as a product and as a medicine, but whatever way it goes, it won't have any effect on us.”

Preliminary results for the recreational cannabis referendum won't be available until October 30.

Burt said the company had no plans on diversifying into recreational cannabis if the referendum passed.

“That would take a massive change from our shareholder base. The investors that started the company, they're very clear on being medicinal only.”

He said Rua Bioscience would leverage New Zealand’s clean, green, international brand to differentiate itself from competitors overseas.

Burt said the listing solidified the company’s reputation, operating in an industry fraught with stigma.

“It frustrates the heck out of me that people don't understand the difference between medicinal and recreational. We don't produce pharmaceuticals from 'weeds' we produce pharmaceuticals from plants.”

He said as with any sunrise industry there were some cowboys.

“The rigour of going through a listing and going public, the sorts of disciplines a company goes through you wouldn't embark on unless you were real and doing something that was doable and meaningful.

“Making up a set of slides and raising money is very different from being held to account for every statement you're making in a product disclosure statement.”