Medicinal cannabis company Cannasouth has had a soft sharemarket debut.
The company listed on the stock exchange this morning after selling $10 million worth of shares at 50 cents each.
Its shares edged a cent above the issue price in early trading, but since then the price has been falling and it’s changed hands as low as 36 cents a share, a 28 percent discount.
The broader market has risen about 1 percent to a record high.
Cannasouth chief executive Mark Lucus said the listing was part of a broader strategy and it plans to use the funds to hire staff and plan for future operations.
“There may be some collaborations with other New Zealand businesses we’ll have to wait and see. But once we get a look at the regulations or the proposed regulations that come out in July we’ll have a better idea.”
The law covering medicinal cannabis was changed last year and regulations for the industry, including a licensing scheme, are currently being drafted.
About half a dozen local companies have emerged over the past year as planning to grow, process, and manufacture cannabis-based products.
New Zealand Stock Exchange (NZX) chief executive Mark Peterson said the listing, the first share float in two years, introduced a new industry to investors.
“It’s a really interesting sector … it’s happening globally and we can we can actually allow New Zealand investors to participate in it,” Peterson said.
He said the NZX has recently brought eight new investment funds to the market, and is expecting a minority stake in the Port of Napier to be floated later this year.
The NZX has been criticised for losing more companies in recent years than have listed.
“We’re in good shape,” he said.