The director of a medicinal cannabis company says he would like the money he invested back, and the direction of the venture remains unclear.
Southern Medicinal began growing medicinal cannabis inside the former paper mill building at Mataura in 2022, and one director claimed it would “disrupt the industry and the black market’’ by producing its products for a tenth of the price of its competitors.
Nearly three years later the company appears to be in limbo. It is not growing plants, has not conducted clinical trials and has not brought any products to the market.
Southern Medicinal was a joint venture owned by Dunedin-based Natural Horticulture and Christchurch-based medicinal cannabis company Soma Group.
At its height in 2022 the company was operating a 10,000m² production area at Mataura with plans to expand to 30,000m² the following season.
In May of that year executive director Greg Marshall told The Southland Times it needed 150 Southland farmers to grow cannabis for the operation, and it had plans for a 500m² lab, storage and processing space. As the venture proceeded it would need $750,000 to build capacity during a six to 12-month period, and $1 million for a nitrogen-injecting canning line.
It had employed eight additional staff and had applied for $2m in funding through the government’s Regional Strategic Partnership Fund, and was seeking approval from Medsafe to run a clinical trial.
Then, nothing.
The Companies Office register showed that Marshall, who was also director of Soma Group, ceased being a director on November 20, 2023.
Director Paul Chamberlain, who also ceased his directorship with the company on August 18, 2023, had not responded to a request for comment.
Marshall had not been able to be contacted, but in November 2023 he told RNZ the company “could not actually sell anything yet”.
"We peaked operating and growing at nine different sites, right now we are operating three. The reason we put sites into hibernation is because the rules in New Zealand are very difficult to navigate,’’ he said.
“Even though there's massive growth in demand, we can't access the market until the rules are changed.”
The company’s website had expired, but Medsafe confirmed Southern Medicinal still had a medicinal cannabis license, which would expire on December 21.
Gregory Paterson, who was a director of Natural Horticulture and owned the paper mill building, and Canterbury high country farmer Michael Salvesen were now listed as the directors of the company.
Salvesen, who became a director in August 2023, was reluctant to talk about the venture when contacted by The Southland Times.
“I’d like to get my money back, but that’s the same for all of the investors,’’ he said.
He would not discuss how much he was owed, or what had happened to the company prior to him becoming a director, for legal reasons.
The company was not growing cannabis inside the mill at the moment and the plant material that had been grown was in storage.
He said Paterson was still involved, and he needed to come up with a better system to grow the cannabis, but would not elaborate further.
The company could ‘’head in a different direction to the one it was in’’ but that was going to take a while, he said.
He said the regulations around growing medicinal cannabis were ‘’very frustrating’’.
Paterson had been unable to be contacted for comment.
A Medsafe spokesperson said the activities that could be authorized on a medicinal cannabis license included cultivation, seed supply, possession for manufacture, research and supply, but it was unable to comment on the activities an individual licensee was authorized to undertake.
Medsafe could not comment on whether Southern Medicinal had ever applied to do a clinical trial of its products, the spokesperson said.
As well as holding a medicinal cannabis license issued by the Medicinal Cannabis Agency, an entity would also need a license to manufacture medicines to authorize the production of the product issued by the Compliance Management Branch of Medsafe.
Before a product could be supplied within New Zealand, the product and its cannabis-based ingredients had to be verified as meeting the minimum quality standard by the Medicinal Cannabis Agency, the spokesperson said.
The Medicinal Cannabis Agency currently had 51 medicinal cannabis license holders, of which 40 had at least one cultivation activity, 12 had a possession for manufacture activity, and 19 had a supply activity.
There were also four medicinal cannabis license holders who held a license to manufacture medicines. While companies were required to provide information to the agency on some aspects of their activities, data such as the number of companies producing medicinal cannabis material or product to supply the New Zealand market was not readily available.
Earlier this year, Christchurch-based medicinal cannabis company Medical Kiwi Ltd was put into liquidation owing nearly $9 million, as was share market-listed medicinal cannabis company Greenfern Industries, from Taranaki.