The medicinal cannabis industry is gearing up for April 1 when the Misuse of Drugs (medicinal cannabis) Regulations Act comes into law. It permits the sale of therapeutic products containing cannabis.
“We spent a lot of time looking at the opportunity to bring different cultivars to the medicinal cannabis business,” Setek chief executive David Pearce said.
“Legally we can transfer 50 seeds or 20 plants on any one licence. It enables us to bring all the genetics into the company.”
SHB owner Brad Hutchinson said New Zealand has a good stock of quality marijuana genetics that goes back to the seventies, developed for illegal sale for its high THC drug content and plant yield.
“However, these genetics have never been tested scientifically.
“It is likely there are some quality genetics out there in plants with trace cannabinoids that can be bred up.”
Initially the ESR was to be sole provider of cannabinoid testing labs but other private companies are also starting to gear up.
As the industry develops some companies have been gearing towards outdoor cropping while others including Auckland firm Helius are based in big, high-security, indoor growing facilities.
Hutchinson said growing indoors or outdoors will in part be determined by Government guidance and the security standards set for crops.
“Canada has had cropping become more outdoor than indoor for the first time last year. The capex cost of contained glasshouses made indoor growing costs high and we believe over the next two to three years we will see more outside cropping,” Pearce said.
Hikurangi Cannabis Company on the East Coast has received approval to grow medicinally approved cannabis outdoors.
“There will be a place for indoor growing, particularly for seed production, but it all comes down to cost.”
Risks for outdoor growing exist, however.
They include possible cross-contamination with hemp crops and, most obviously, security risks and theft. Expectations are security standards outdoors here will demand 3m high fences, patrols and alarms.
“In Oregon they also have the problem of seeds dropping along roadsides and ditch weed growing.”
Pearce believes there will be a flood of overseas products entering NZ from April 1 but over time NZ companies will build their resources and a strong provenance story to grow the market.
He expects initial products will focus on areas like pain relief, particularly arthritis, while skin creams are another area.
However, the stumbling block for growth in prescription drugs will be a dearth of clinical research to back up anecdotal evidence of cannabinoid based drugs’ effectiveness.
“The cost and compliance for research is high and this will weed a lot of companies out.”
Setek has aligned itself through a memorandum of understanding with AFT Pharmaceuticals, a company with specialist skills in innovating and trying drugs.
Despite the obvious buzz around the NZ market opening up to a whole raft of completely new products Setek is in no rush to have first-mover status.
“As the regulatory framework is put in place we want to be able to adjust to those changes.”
Both men see NZ’s greatest advantage in a world dominated by some big players as being this country’s high level of growing and agri-tech talent and the ability to pursue an organic certified status for crops if desired.
“The success in NZ is much like it is for any other product we can grow well here.”
Hutchinson said NZ’s growing environment is also well suited to cannabis, with an ultraviolet spectrum that encourages strong growth behaviour.
“There is also anecdotal evidence that thanks to this NZ also grows high cannabinoid content cannabis compared to the rest of the world. When you look at our native plants, they have high levels of medicinal metabolites in them so this may be the case,” Hutchinson said.
He is looking forward to the potential for NZ farmers and horticulturalists to participate in the returns from a new, high-value crop coming hard on the heels of hemp production picking up pace.
