- Type: Retail and Wholesale
- Total Round Size (min): NZ$1,000,000
- Total Round Size (max): NZ$4,000,000
Greenfern Industries is now accepting public investments.
The offer has hit its maximum retail allocation of $2 million. Shares are still available for accredited wholesale investors. If this applies to you, please update your profile with the required documentation.
The offer has been extended to the 27th of October. Please note an updated Information Memorandum has been attached as at October 19 with further disclosure regarding the purchase of the hydropower station, and clarification of the Company's medicinal cannabis licensing.
- Company: Greenfern Industries Limited
- Security Type: Investor Shares
- Minimum Parcel Size: $500
- Fees Paid by Issuer: 6% of Funds Raised
- Offer Terms: Total retail investment is limited to NZ$2,000,000. The remaining NZ$2,000,000 allocation is restricted to Wholesale or Qualifying Investors, of which NZ$200,000 has already been issued.
What is Greenfern Industries?
Greenfern Industries was established to support the emerging medicinal cannabis and hemp industries, in New Zealand and abroad. Based in Taranaki, New Zealand, the Company produces therapeutic and medicinal products to service a rapidly expanding market. A focus on sustainability and quality sets the Company apart, with extensive experience and innovation in research driving it forward.
Powered by a hydropower station at the base of Mount Taranaki, Greenfern held a medicinal cannabis licence to cultivate CBD and THC dominant strains for research purposes that was recently superseded by the new Medicinal Cannabis Scheme. The Company is awaiting a site inspection for its new commercial cultivation licence application under the new scheme. For more information please see page 7 of the Information Memorandum.
The team is currently building a state-of-the-art facility to ramp up its research and production capabilities. It also engages in B2B and B2B2C applications of hemp production and processing.
- Unique Competitive Advantage
The hydropower station powering Greenfern's operations provides significant power savings and reduces the Company's environmental footprint. Greenfern intends to purchase the hydropower station following this capital raise to further entrench these advantages.
- Validated Business Model
Greenfern has secured numerous exclusive licensing and distribution agreements. These agreements cover a range of products, providing validation for the Company's diverse approach.
- Innovative Research
Greenfern continues to pioneer innovative applications of CBD/Hemp. The Company is developing a unique medicine formulation and owns the IP for a hemp-based meat alternative.
- Experienced & Diversified
Greenfern derives multiple sources of revenue, including wholesale distribution of hemp and cannabis flower, alongside consumer products such as its hemp body care product line (MaTo).
- Significant Market Opportunity
With a range of therapeutic and medicinal applications already regulated around the world, and an increasing market opportunity for recreational use, Greenfern is well-positioned to capitalise and scale.
- IPO Plans
Greenfern has intentions to conduct an IPO next year, providing a platform for further growth and liquidity to investors. Shares in the offer are illiquid and cannot be easily traded. Although Greenfern's current intention is to undertake an IPO, there is no guarantee that Greenfern will undertake an IPO.
Greenfern operates a robust business model across multiple channels. Its high quality outputs and products are sold B2B to targeted industries, in addition to B2B2C to the public through a range of distribution channels. Greenfern has focused on vertically integrating its operations in order to create higher-value products from raw ingredients. This allows the Company to efficiently manage its entire supply chain, and maintain its core focus on quality and sustainability.
With functions that span from growth and harvesting, to processing, manufacturing and distribution, Greenfern has the capabilities to generate revenue from a range of sources simultaneously, and can capitalise on multiple market trends as opposed to limiting itself to just one.
Greenfern operates three primary cultivation locations in New Zealand in order to diversify its revenue streams and product mix.
Normanby - Taranaki
The Normanby facility is powered by the on-site hydropower station allowing it to operate with extremely low overhead costs. This will act as a regional hub for farmers in the area. The Phase 3 status of this facility will allow the Company to produce 12,600kg of medical grade cannabis annually, with research, cultivation, extraction, processing, manufacturing and distribution all in one space.
Lake Hawea - Central Otago
The Lake Hawea facility is an outdoor broad acre hemp cultivation location primarily for hemp seed for food production. Since it is located on the South Island, this facility complements the North Island location by spreading the risk of climate-caused crop failure.
Haast - West Coast
The Haast facility operates as an outdoor hemp cultivation location for research, breeding and seed banking. This is integral to the ongoing maintenance and development of plant strains and product quality. The isolation of this location provides an excellent base for breeding and cultivation to build up seed stock.
Artist's impression only
The core component of Greenfern’s business strategy is the creation of high value products using sustainably sourced and high-quality inputs. Its vertically integrated business model allows the Company to service business and consumer end clients. With a focus on future product development and innovation, this will be a key factor in growing Greenfern’s market share and sustaining its ongoing value. Greenfern also intends to position itself as a positive impact company, through both the application of its products and through its focus on sustainability.
Artist's impression only
A key source of future value for Greenfern is the range of future products that the Company can diversify into, given its current base capabilities and assets.
IP for Medicinal Products
While Greenfern plans to export its dried cannabis flowers at wholesale rates, it also intends to develop its own range of medicinal products under its own unique IP. The Company is in the process of developing this technology in order to generate a higher revenue margin on its cannabis cultivation.
Nutraceutical Manuka Honey + CBD
Greenfern is also developing a nutraceutical Manuka honey formulation that will include CBD isolate to provide therapeutic benefits to consumers. This lifestyle product will be distributed in a B2B2C capacity and will provide wide consumer exposure for the Company and its products.
Greenfern has developed a hemp-based meat alternative using a bi-product of its hemp production and processing. This unique and innovative IP will provide a strong source of revenue for the Company, through licencing and volume-based royalty agreements.
As part of Greenfern’s growth strategy, the acquisition of the Normanby hydroelectric power station will play an integral role in minimising overhead costs and maximising sustainability practices.
With the proceeds of this capital raise, Greenfern intends to purchase the station outright in order to further entrench these benefits. This will provide the Company with access to clean, renewable energy.
Furthermore, additional power generated will be sold back to the grid, providing others in the region with access to a source of renewable energy, and the Company with an additional revenue stream.
Certain Greenfern shareholders have a direct or indirect ownership interest in the Normanby hydroelectric power station. Details are provided on page 18 in the updated Information Memorandum. As noted in the Information Memorandum, Greenfern has an option to acquire the power station. The option agreement was negotiated on an arm's length commercial basis. Greenfern's board obtained valuation advice from a third party hydro power specialist firm and negotiated the best price and terms for Greenfern that it considered could be obtained.
Greenfern continues to engage in a number of research projects pertaining to cultivation practices and final product applications. These research initiatives will provide an ongoing source of value for the Company as it continues to innovate and build new revenue streams while acting as a market leader.
Greenfern is conducting a one-year trial with a pilot system for aeroponic crop irrigation. Compared with traditional field grown crops and deep water hydroponic growth, aeroponic irrigation requires less nutrients and uses substantially less water.
Anxiety Clinical Trial
To test the applications of its trademarked Theonol medicinal product, Greenfern will conduct observational clinical trials targeting anxiety. The Company will use smart wearable devices to collect data with test patients in both New Zealand and Australia.
Hemp Protein Isolate
As part of its hemp meat alternative, Greenfern uses the by-product of cold pressing hemp seeds to produce a relatively high protein distillate. The Company is now researching a method to refine the distillate into an 80%+ hemp protein isolate.
Poultry Litter & Hemp
Greenfern is conducting a multi-year trial over two locations to test the effectiveness of poultry litter as a fertiliser for broad acre industrial hemp production.
In December 2018, the New Zealand Government passed legislation that allowed easier access to medicinal cannabis products and opened up the opportunity for a domestic industry to be established. Greenfern became one of a few New Zealand companies with a research cultivation licence ready to take advantage of this new legislation.
There are currently 235,000 medicinal cannabis users in New Zealand and with 33% of people willing to try therapeutic cannabis products, the industry is expected to be worth NZ$1 billion locally.
Global spending on legal cannabis is forecast to reach $57 billion by 2027, with adult-use sales driving the industry to the tune of $38.3 billion. Medicinal sales are estimated to comprise $19.1 billion.
The United States and Canada are expected to lead the way – from $9.2 billion last year to $47.3 billion by 2027, the research suggests, with an annual compound growth rate of 18%.
Key Team Members
For more information please see section Directors, Advisors and Management (page 24) of the Offer Document.
Dan is a Project Manager and civil engineer within the Civil Construction sector and has over 15 years industry experience both in New Zealand and abroad. Dan is experienced in all facets of the project lifecycle of large-scale developments and intends to leverage his networks and their expertise in the procurement, scheduling and delivery of all facility builds. As Managing Director, Dan is ultimately responsible for the overall management of the business - setting Greenfern’s strategy to ensure that it delivers on its shareholder and clients expectations.
Daniel has managed his own small businesses for many years before taking on the position of Project Director managing both small and large scale domestic and commercial electrical installations. Daniel’s experience in this field is vital to the establishment of a facility that is technologically advanced to allow off-site back-to-base management.
Hemp farmer, entrepreneur and business owner of The Slammer Tool. TJ has a wealth of knowledge and contacts within the medicinal cannabis industry in both the United States and here in New Zealand. TJ has been a holder of numerous industrial hemp growing licences here in NZ. He is an advocate for the industry and a keen educator and mentor within the Hemp Industry here in New Zealand.
A Massey University graduate, Andrew is in charge of Greenfern's new growing operations in South Taranaki. Andrew brings world class agricultural expertise to the team. In his role as Research Manager he will be performing trials and optimising the Company's new state of the art indoor grow facility alongside managing the hemp processing and hemp research being undertaken in South Taranaki.
For more information see section Financials (page 31) of the Offer Document.
Use of Funds
For more information please see section Use of Funds (page 36) of the Offer Document.
Key Risks Facing the Business
For more information see section Risks Facing the Business (page 32) of the Offer Document.
The Company’s industry is highly regulated and business activity is impacted by any regulatory changes in the space. Certain shifts locally and abroad could significantly affect the operations of the business and its potential opportunities.
The Company relies on a number of key individuals in the ongoing management and operations of the business. If any of these individuals were to leave, it could prove difficult to find ideal replacements, thus harming the Company.
The Company is competing in a relatively young and fast moving industry. If new market entrants, both locally or abroad, were to introduce more innovative techniques or products, this would impact the Company’s market share.
The Company faces inherent agricultural risk owing to its operational industry. As such, revenue streams could be severely affected by events outside of the Company’s control such as natural disasters and undesirable weather patterns. The destruction or damage of any given plantation would impact profit margins.
A key component of the Company’s growth plans revolves around the purchase of the Taranaki Hydropower station. If this deal were to fall through or the terms were to change negatively, this would impact on growth projections and financial outcomes.
The power station goes down due to repairs and maintenance affecting the delivery of renewable power to Greenfern’s facilities. This is considered a low risk because Greenfern is able to use power from the grid during these times.
The Company’s target market, locally and abroad, is relatively new and undeveloped. If market uptake of the Company’s products is limited, this may impact on future growth milestones and company performance.
Due to the COVID-19 pandemic, the Company faces an unavoidable dampening effect. Failure to produce a timely vaccine, or further outbreaks both locally and abroad, will have a negative effect on demand levels and potential company growth in the short term.
Why Equity Crowdfunding
With a clear pathway to multiple revenue streams, Greenfern is going to the crowd for the second time, offering Kiwis the opportunity to invest and join the team. The Company is raising funds to purchase a hydropower station to produce sustainable and accessible medicinal cannabis products and fast-track its growth for a potential IPO in 2021.
Having always had a core focus on benefiting the wider community with its products, Greenfern also wants its community to share in its success as it grows and scales its operations.
New Zealand Financial Markets Conduct Regulations - Warning Statement About Equity Crowdfunding
Equity crowdfunding is risky. Issuers using Equitise’s facility include new or rapidly growing ventures. Investment in these types of businesses is very speculative and carries high risks.
You may lose your entire investment, and must be in a position to bear this risk without undue hardship.
New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.
The usual rules do not apply to offers by issuers using Equitise’s facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.
Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.