Greenfern Medicinal Marijuana Ltd

Greenfern Medicinal Marijuana Ltd. a therapeutics company based out of Normanby, Taranaki – established to support the emerging medicinal cannabis industry within New Zealand.
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Amount raised

$181,000 |  36% FUNDED
Max target: $2,000,000 (for 30% of company)
Min target: $500,000 (for 9.68% of company)
Share class offered: Non-voting Investor Shares
Share price: $1 per share
Offer closed in 45 days
$181,000 Funded
$2,000,000 Max target (30% equity)
$500,000 Min target (9.68% equity)
$319,000 Still available for investment
Offer closed in 45 days

Executive Summary

Greenfern Medicinal Marijuana Ltd. a therapeutics company based out of Normanby, Taranaki – established to support the emerging medicinal cannabis industry within New Zealand.

Greenfern Medicinal’s business model involves the establishment and development of facilities, resources and collaborative arrangements with the intention of operating as a fully comprehensive grower, manufacturer and supplier of medicinal cannabis products with regards to:

Cultivation – Breeding and growing the highest quality Cannabis strains by leveraging capabilities and proficiencies in plant genetics and breeding.

Extraction – CO2 extraction producing concentrated oil for use in therapeutic products.

Manufacture – creating fit-for-purpose, medicinal cannabis products (which includes cannabis and its chemical components cannabinoids), that can be used for curing, or alleviating the symptoms of, disease, ailment or injury.

Distribution – supplying to a wholesale sales channel in specific industry sectors, where medicinal cannabis products expect to be sold to benefit consumers (as per industry guidelines).

For decades the physical effects of chronic, life-threatening and terminal illnesses like cancer, Parkinson’s, MS and epilepsy have been treated with pharmaceutical drugs.However, anyone with first-hand experience with these conditions will know that the side effects of many pharmaceutical products used to manage pain, have a negative impact and can be life-limiting.

Until now, alternatives like medicinal cannabis have not been legally available – but the future of the industry is on the brink of change. Results from countries that have already approved medicinal cannabis are outstanding.

On a global stage, New Zealand has the opportunity to take a leading role in the development of medicinal cannabis through its reputation as an innovative country with a strong heritage in medicinal research, product development and farming ‘Pure NZ’ cultivation.

New Zealand’s proposed Amendment Bill to the Misuse of Drugs Act 1975 was tabled in Parliament on 20 December 2017. The changes proposed are part of the Government’s 100 Day Plan to introduce legislation to improve access to medicinal cannabis for terminally ill people and those in chronic pain. The changes, which would come into force from 2019 onwards, are intended to strengthen the existing therapeutic model and improve access to medicinal cannabis based on principles of fairness, quality and safety, and compassion.

Greenfern Medicinal is at the grass roots of its trade opportunity, with the goal to set up the operational infrastructure of the company to be ‘ready for trade’ once appropriate licences and related permits have been secured under the new Misuse of Drugs (Medicinal Cannabis) Amendment Bill.

A site has been secured for the new facility, which is located adjacent to a hydropower station owned by Renewable Power Ltd and overlooking Mount Taranaki. Access to electricity from the adjacent hydropower plant at a discounted (against retail commercial prices) price provides a unique strategic advantage. In partnership with the hydropower station, Greenfern’s facility will operate with a sustainable water supply and access to hydroelectric energy positioning it as leaders in environmental sustainability and illustrating the brand intent of promoting New Zealand’s Pure NZ status.

Greenfern Medicinal can see the future and has a mission to be a thought leading pioneer in the emerging new medicinal cannabis industry.

Operating as a ‘People’s Company’, Greenfern Medicinal has a philosophy of ‘Patient before Profit’, and a goal to provide customers with a safe, reliable, affordable and natural alternative to traditionally prescribed toxic pharmaceuticals.

The corporate vision is to produce products that improve the lives of suffering New Zealanders who seek an alternative, more holistic approach to their medication intake.

“At Greenfern Medicinal We Will Stand by Our Name, Our Service and Our Product.”

Our Information Memorandum represents the business model and strategic intent associated with Greenfern Medicinal Marijuana Limited. Forecasts have been prepared for the first year of trading, with projections for years two and three based on growth of the number of plants cultivated and oil extracted.

Sustained growth is expected as industry regulation takes hold, the industry becomes established and new market segments open up.

Important note regarding payments:

Due to our obligations at law we are unable to accept payments from third parties, that is a payment not from you.  Third party payments include (but are not limited to) payments from a third party individual, a third party company, a family trust or a joint account.

Please make sure your payment is from your own account. Otherwise we will have to refund to the payer’s account and your investment will be unsuccessful.

If you are registered with Collinson Crowdfunding as an individual, please make sure your investment payment is from your personal account. Unfortunately we are not able to accept payment from a joint account and such payment will be refunded.

If you are registered with Collinson Crowdfunding as a company, please make sure your investment payment is from the company account. Unfortunately we are not able to accept payment from an individual account and such payment will be refunded.

The Offer

We’re offering shares in Greenfern Medicinal Marijuana Limited to raise a minimum of $500,000 and a maximum of $2,000,000 for up to 30% of the company. Shares are priced at $1 each. The minimum investment amount is $500 for individuals and $1000 for joint holdings, companies and other structures.

Equity
From NZ$500,000 for 9.68%
Up to NZ$2,000,000 for 30%

Share Class
The share class on offer is Investor shares. These are non-voting shares that do not give the holder the right to vote at meetings of shareholders. In very limited circumstances (to ensure the shareholder’s core rights are protected) each non-voting share gives the holder the right to one vote. This only occurs where there is a proposal or resolution:

that will affect the rights attached to the Investor Shares;

Non-voting shares will give the holders:

The right to an equal share in dividends and other distributions made by Greenfern Medicinal Marijuana Limited (subject to the rights of any other class of share); and

The right to an equal share in the distribution of surplus assets of Greenfern Medicinal Marijuana Limited.

Further information on the rights and restrictions associated with Investor share class is set out in The Greenfern Medicinal Marijuana Constitution, which you should read before subscribing for any shares.

Shareholder details before and after raise

 

Pre-raise

Post-raise

(minimum $500k)

Post-raise

(maximum $2m)

Shareholder

No. of shares

Ownership %

No. of shares

Ownership %

No. of shares

Ownership %

John Hussey

975,118

20.90%

975,118

18.87%

975,118

14.63%

Timothy Johnson

877,727

18.81%

877,727

16.99%

877,727

13.17%

Brendon Partridge

760,649

16.30%

760,649

14.72%

760,649

11.41%

Daniel Casey

760,649

16.30%

760,649

14.72%

760,649

11.41%

Daniel Leyden

737,345

15.80%

737,345

14.27%

737,345

11.06%

Kevin Chong

202,818

4.35%

202,818

3.93%

202,818

3.04%

Renewable Power Limited

175,578

3.76%

175,578

3.40%

175,578

2.63%

Timothy Irvin

93,293

2.00%

93,293

1.81%

93,293

1.40%

Fluke Creative Limited

46,687

1.00%

46,687

0.90%

46,687

0.70%

Stuart Kirkham

23,303

0.50%

23,303

0.45%

23,303

0.35%

Thorin Siglin

4,500

0.10%

4,500

0.09%

4,500

0.07%

Rachael Bailey

4,500

0.10%

4,500

0.09%

4,500

0.07%

Aaron Marsh

4,500

0.10%

4,500

0.09%

4,500

0.07%

Crowd Investors

-

-

500,000

9.68%

2,000,000

30.00%

Total

4,666,667

100.00%

5,166,667

100%

6,666,667

100.00%

 

Valuation

Greenfern’s valuation was undertaken by the current shareholders. As this is a new emerging industry globally and in New Zealand, it is difficult to perform a comparative analysis against similar companies.

It has been calculated using a ‘multiple of projected revenue’ method. The shareholders are comfortable that a multiple of 4.7 times the projected revenue from our first growing operating year is a fair market value.

Canadian cannabis company valuations:

Company

Enterprise value (M)

Projected Revenue (2019) (M)

Revenue Multiplier

Canopy Growth

8,925

330

27.0

Aurora Cannabis

5,584

460

12.1

MedReleaf

2,671

146

18.3

Aphria

2,489

220

11.3

Cronos Group

1,674

134

12.5

Hydropothecary

688

101

6.8

CannTrust Holdings

911

218

4.2

OrganiGram Holdings

635

110

5.8

Supreme Cannabis

384

79

4.8

Source: Capital IQ, Company Reports, PwC Analysis. Data as at June 20, 2018.

Ongoing shareholder relationship

Dividends - Greenfern do not anticipate paying dividends in the short term as it is planned to reinvest profits back into the business to fund growth. This will be reassessed periodically and Greenfern may pay dividends when the company does not require further investment and is trading with a comfortable profit.

Trading Shares – There will be no liquidity (ability to sell shares). However, Greenfern may facilitate transfers between buyers and sellers and Greenfern itself may be a willing buyer. It is not ruled out that a share market listing may happen in the future. If it does then liquidity might become available.

Exit – Greenfern does not have a predetermined view on how or if it will exit, however, Greenfern is open to this potential and believes that as the new industry matures mergers and acquisitions are highly likely.

 

Business Administrations

Government Registrations

Company Details

Greenfern Medicinal Marijuana Ltd

NZBN

6804155

Trading Name

Greenfern Medicinal

Address

Taranaki, New Zealand

Website

www.gmm.nz

Facebook

www.facebook.com/greenfernnz

Board of Directors

Director

Tim Johnson

Contact Telephone

021 034 3284

Contact Email

info@gmm.nz

Director

Daniel Leyden

Director

Daniel Casey

Management Team

The company’s board members have been chosen based on their alignment with the goals and values of the company. Each member contributes diverse, yet important tangible and relevant expertise that is expected to deliver success for the company

Board of Directors

Daniel Leyden – Daniel has managed a small business for many years before taking a position as a Project Manager, 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.

Daniel Casey – Daniel is a Project Manager within the Civil Construction space and has over 15 years industry experience internationally. Daniel is experienced in all facets of the construction project lifecycle of large-scale developments and intends to leverage his networks and their expertise in the construction of the new state of the art facility and further facilities in the future.

Advisory Board

Timothy Irvin – Hemp farmer, entrepreneur and business owner of The Slammer Tool. TJ has a wealth of knowledge and contacts within the medicinal cannabis industry in the United States and New Zealand. TJ is the holder of a current industrial hemp growing licence here in NZ.

Thorin Siglin – Thorin was born in Colorado, USA and raised in Australia as a dual citizen. Thorin has been involved with medicinal cannabis since 2010 when he applied for a medicinal cannabis license and started working closely with Laplata Labs, where he developed expertise in the field of cannabis genetics and distribution. Thorin has worked at events such as the Hightimes Cannabis Cup and California’s Emerald Cup in Santa Rosa and travelled around the US and abroad educating people about quality strains and how they can best benefit them as medicine.

Brendon Partridge – Originally from New Zealand, Brendon is now residing in Asia. He is an investor in international hotels and is working for an international Fortune 500 Hotel Company. Brendon has a network across Asia that can be leveraged to explore export opportunities in Asia – especially within the hotel industry.

Rachael Bailey – Rachel has many years’ experience dealing with consumers of alternative medicinal products. She is a member and administrator of the Green Fairies forum on Facebook, which connects people in need of alternative medicinal products with New Zealand based suppliers.

Fluidity Limited – specialises in Blockchain technology and intends to leverage their expertise and company infrastructure to integrate Blockchain technology into the new cultivation and manufacturing facility – thereby enhancing security, accountability, traceability and process governance for the company.

Combined, the Board of Directors and its Advisory Board present as a cohesive team with symbiotic skills, experience and expertise. They have far-reaching networks that extend into numerous industry sectors that it is expected will form the basis of Greenfern Medicinal’s wholesale sales channel and allow for immediate trade potential in what will be a growing market opportunity.

Related Party Disclosures

Tim Johnson (Director) is also a Director at Renewable Power Limited which is the owner of the land where Greenfern intends to build its growing facilities.

Dan Casey (Director) is a minor shareholder of Renewable Power Limited.

Business Overview

Greenfern Medicinal intends to operate as a grower, oil extractor, manufacturer and supplier of medicinal cannabis products to specific industry sectors as a Business-to-Business (B2B) operation.

Products

Evidence suggests that the cannabis plant has been used as a medicine for mind and body in different cultures all over the world for millennia. This aromatic herb contains a diverse array of natural chemical compounds (called cannabinoids and terpenes) that are secreted by its flowers. The two main cannabinoids that have been identified for therapeutic applications are the psychoactive 9-tetrahydrocannabinol (THC) and the non-psychoactive cannabidiol (CBD).

When medicinal cannabis is consumed, cannabinoids bind to receptor sites in the brain and body interacting with the body’s own endocannabinoid system which influences pain, mood, memory and appetite in humans and animals. There is an increasing use of medicinal cannabis products in treating a wide range of ailments and symptoms including Parkinson’s, epilepsy, multiple sclerosis, chronic pain, nausea, post-traumatic stress disorder, premenstrual syndrome, glaucoma, and autism amongst others.

Other conditions which may benefit from medicinal cannabis treatments are:

Severe muscle spasms or severe pain resulting from multiple sclerosis.

Severe pain arising from cancer, HIV or AIDS.

Severe nausea, severe vomiting or severe wasting resulting from cancer, HIV or AIDS (or the treatment thereof).

Severe seizures resulting from epileptic conditions where other treatment options have not proved effective or have generated side effects that are intolerable for the patient.

Severe chronic pain where medicinal cannabis may in all the circumstances provide pain management that is superior to what can be provided by other options.

Medicinal cannabis can be administered in several forms including: orally as a tincture or via oil-filled capsules; topically via skin creams and transdermal patches; infused into food products such as olive oil; or vaporised for respiratory delivery.

Sales Channel

Greenfern Medicinal’s sales channel will be governed by the legislation surrounding the pathway of access for consumers. As the products manufactured are intended for medicinal use, there will be specific industry sectors that will benefit from access to Greenfern Medicinal’s products such as:

Pharmaceuticals – raw materials for tablets and prescription drugs.

Medicinal – vaporisers and capsules.

Health & Beauty – topical creams and patches.

FMCG Market – oils, retail products and tinctures.

Recreational – cigarettes and/or powder.

Pricing Structure

As a wholesale only business, Greenfern Medicinal will provide the sales channel with a pricing matrix that is indicative of the minimum order value, which then dictates the price per ml, of oil purchased.

Customer Size

Minimum Order Value

Small-Medium Business

No minimum

Medium-Large Business

$5,000

Large Enterprise

$10,000

 

Industry Opportunity

Global Market Opportunity

According to a report from Arcview Market Research and BDS Analytics, global spending on legal cannabis is expected to reach $57 billion by 2027, with adult-use sales driving the industry to the tune of $38.3 billion. Medical sales are estimated to comprise $19.1 billion.

The U.S. and Canada are expected to lead the way – from $9.2 billion last year to $47.3 billion by 2027.

The CAGR for the rest of the world is estimated at 47 percent, representing a jump from $52 million in 2017 to $2.5 billion by 2027.

The report notes that Europe and its $1.5 trillion in healthcare spending, has the potential to be the largest medicinal cannabis market on the planet. South America’s medicinal cannabis market is expected to grow from $125 million this year to $776 million by 2027.

In Australia, the report estimates a CAGR of 53 percent, representing an increase from $52 million this year to $1.2 billion in 2027 – the fifth largest market in the world.

https://www.ganjapreneur.com/report-global-cannabis-spending-could-reach-57b-by-2027/

In Canada, Corona beer maker Constellation is infusing another $4 billion into Canada’s top cannabis producer Canopy Growth – which is the biggest investment in the industry to date.

Constellation was among the first big alcohol makers to invest in the marijuana industry, pumping almost $200 million into Canopy last year in a deal to produce a non-alcoholic cannabis-based beverage. This new $4 billion investment will support Canopy’s full suite of products and assist as it develops new offerings.

Canada, where 4.4 million people reported using marijuana in the first half of the year, approved medicinal marijuana in 2001 and fully legalised the recreational use of cannabis in October.

Canopy will use the funds to expand and gain exposure to the nearly 30 countries likely to approve medicinal marijuana in the future. It is targeting C$1 billion in overseas acquisitions over the next six to 12 months.

https://www.reuters.com/article/us-canopy-growth-stake-constellation/corona-owner- invests-another-4-billion-in-cannabis-producer-canopy-idUSKBN1L0155

Changing Customer Segmentation

Typically, marijuana users were viewed as ‘stoners’ – think of an unwashed, layabout youth with no plans or desire to make anything of themselves.

The use of medicinal cannabis has dramatically changed the perception of the cannabis industry in California, where households don’t exactly fit into the unmotivated ‘stoner’ stereotype.

In fact, the average household income of cannabis consumers in the US is $93,800. While 69 percent are employed full time, 64 percent are parents, and 34 percent have children aged 10 or younger. Most who purchase it for medicinal or recreational purposes have said they do it in order to manage anxiety, pain relief or to get a better night’s sleep.

https://idealog.co.nz/venture/2018/06/could-investing-new-zealand-cannabis-companies-be-next-green-rush

It is increasingly becoming a middleclass phenomenon from two perspectives:

Global momentum around the merits of medicinal cannabis is growing with governments introducing and/or amending legislation to facilitate the legal use of medicinal cannabis in various countries around the world.

Cannabis has moved on from the ‘stoner’ perception of young people smoking behind the school shed and cannabis oil is increasingly being used in FMCG products that benefit health and wellbeing, without any negative effects.

Medicinal cannabis is now seen as a potentially fast growing and valuable sector by investors and there has been considerable global interest in the cultivation and manufacture of medicinal cannabis products, alongside the growing demand from patients seeking access to these products.

NZ Market Opportunity

The Drug Harm Index, published last year, estimated the number of dependent cannabis users at 26,000, with another 250,000 casual users, consuming an overall 27,000kg of cannabis per year, or 100g on average per user.

https://www.stuff.co.nz/business/92863856/turning-new-zealands-black-market-cannabis- economy-green

While the market size for medicinal cannabis in New Zealand is hard to quantify, the Ministry of Health’s estimates that the above 250,000 casual users are in fact medicinal cannabis users, with a market worth approximately $1 billion.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12070706

The opportunities for the New Zealand market are inextricably tied to the result of the Bill Amendment. The market size and rate of growth in New Zealand will be significantly influenced by existing laws and regulations pertaining to the manufacturing and sale of therapeutic goods.

The laws will govern the cultivation, production and manufacturing of cannabis and medicinal cannabis products along with patient access to medicinal cannabis products, including the conditions which are approved for medicinal cannabis treatment.

Greenfern believes that there is large growth potential for local industry – just look at the history of New Zealand’s wine industry.

At first glance, the history of wine in New Zealand looks short. Wines made from classic European grape varieties have only been widely available since the 1980’s and only since the 1990’s have the country’s Sauvignon Blanc’s and later Pinot Noir’s carved out a significant presence in the international markets. It was a market once traditionally dominated by producers in the Northern Hemisphere, but now New Zealand is seen as a leader in superior quality varietals.

Once legislation is changed, the growth of marijuana as a medicine or a pharmaceutical grade product, will fast become a commodity and it is expected that producers can enjoy tremendous growth opportunities – which is a growth trajectory that Greenfern Medicinal intends to become a part of.

Market Positioning

Target Markets

Greenfern Medicinal intends to not sell direct to consumers – instead it will be a Business- to-Business (B2B) operation, supporting the sales channel in the on-sell to consumers as per industry legislation. Greenfern Medicinal has the following target markets – which have been sized to show the market opportunity.

Sales Channel

Greenfern Medicinal aims to target specific industry sectors that might benefit from its products. These include:

Pharmaceuticals – raw materials for tablets and prescription drugs.

Medicinal – vaporisers and capsules.

Health & Beauty – topical creams and patches.

FMCG Market – oils, retail products and tinctures.

Recreational – cigarettes and/or powder.

As Greenfern Medicinal is manufacturing medicinal cannabis, the business targets all industry sectors that are part of the Pharma Industry. Products that are deemed medicinal and as per industry definition. “Part of the industry that discovers, develops, produces, and markets drugs or pharmaceutical drugs for use as medications.”

Reaching the wholesale channel to create supply agreements will be by way of Business to Business (B2B) activities such as relationship marketing (leveraging the management teams’ vast networks), direct marketing, networking – as well as online presence and branding. Agreements will be developed based on ability to supply a large network, selling territories and quantity targets in order to effectively cover the greatest possible infiltration of New Zealand’s industry. Relationship building will be important to ensure sustainable trade. Securing preferred supplier networks will allow for larger order volumes, larger invoices and a more stable cash flow management system.

End Users

End users refer to the consumers who will purchase medicinal cannabis products. They can be segmented via two core demographics.

Medical Customers:

Given that future licencing and permits are based on the ability to manufacture medicinal cannabis products, medicinal customers are the core demographic for Greenfern Medicinal.

These customers have been segmented as follows:

Sick and in need of pain relief.

Most likely in the older demographic Gen X or Baby Boomers who have cancer, arthritis, Parkinson’s etc. – but this doesn’t discount children who have a sickness, epilepsy, cancer or other.

Devoted to a specific product or product category.

Intensely concerned with quality and consistency.

Driven by the goal to improve quality of life.

Three times as likely as recreational customers to use cannabis products on a daily basis.

Develop personal connections to the staff at the dispensary they work with.

Prefer products without psychoactive effects.

There will be a specific focus on people who are in ‘end of life’ care. Greenfern will work with hospices to identify those in most need and provide free product support for them based on their health requirements.

Health/Wellbeing Customers:

There is a segment of the market who will be drawn to health and wellbeing products such as hand lotions, beauty care etc. (as and when they are permitted to be manufactured) – the more hemp style products.

These customers have been segmented as follows:

Younger – Gen Y and Millennials who look for alternative health and wellbeing products.

Enjoy experimenting with different products and strains.

Willing to try new products rather than sticking to those they have used in the past.

Driven by the experience the product offers.

Concerned with a balance between quality and price.

Are open to multiple methods of administration.

Have a strong interest in the products with psychoactive effects

Will become brand advocates and actively promote the brand to others – including their older family members.

A site has been secured for the new facility, which is located adjacent to a hydropower station owned by Renewable Power Ltd and overlooking Mount Taranaki. Access to electricity from the adjacent hydropower plant at a discounted (against retail commercial prices) price provides a unique strategic advantage.

The current New Zealand Government’s recent decision to halt the issuing of new oil and gas exploration permits, further support’s Greenfern’s strategic advantage as a ‘green’ operation. Greenfern’s facility will operate with a sustainable water supply this together with access to hydroelectric energy positions it as leaders in environmental sustainability and illustrates the brand intent of promoting New Zealand’s Pure NZ status.

Market Sizing

Greenfern Medicinal will be manufacturing and distributing medicinal cannabis products to sectors within New Zealand’s Pharma Industry. New Zealand’s last published report Facts & Figures About the Health & Pharmaceutical Environment in NZ quantified the size of New Zealand’s Pharma Industry.

Medicines play an important part in maintaining the health of New Zealanders. 41.1 million funded prescriptions were written between July 2011 and June 2012 and 3.3 million New Zealanders benefited from these medications – with an overall industry spend of $748.5 million spent on prescribed pharmaceuticals.

In 2017, a new report New Zealand’s Medicines Landscape quantified the state of New Zealand’s major health concerns – which are all concerns where patients could benefit from medicinal cannabis products:

There are 624,000 patients with Arthritis – costing New Zealand $3.2 billion per annum.

In 2014, 20,000 people were diagnosed with cancer and 9251 have died.

Cancer treatment costs New Zealand $880 million per annum and our country has an average cancer rate that is 62% higher than the world average.

 

While the Pharma Industry is difficult to size with regards to medicinal cannabis this data does show a core market that can benefit from Greenfern’s medicinal cannabis products now – 624,000 arthritis suffers and 20,000 (per annum) cancer patients.

http://www.medicinesnz.co.nz/assets/Documents/MNZ-DidYouKnow-0318-Web.pdf

http://www.medicinesnz.co.nz/assets/Documents/Medicines-Landscape-2017.pdf

This market can be extended even further when consideration is given to those with epilepsy which is a condition that it is suggested could benefit from medicinal cannabis medication.

A new trial using medicinal cannabis to treat epilepsy in children has returned exceptional results.

The trial at Sydney Children’s Hospital showed all but one of a trial group of 40 saw positive results from using medicinal cannabis to treat their condition. The trial aims to eliminate the pharmaceutical drug resistance that is being shown by just under one third of the people diagnosed with epilepsy who will fall into this group.

Epilepsy New Zealand has verified that there are 48,000 people in New Zealand with epilepsy, if one third are drug resistant, then there is over 15,000 that could benefit from a medicinal cannabis alternative.

https://www.newstalkzb.co.nz/on-air/early-edition/audio/graeme-ambler-medicinal- cannabis-trial-proving-effective-in-treating-epilepsy/

This gives Greenfern Medicinal access to the following broad ‘marketable’ demographic of people who might benefit from medicinal cannabis products:

624,000 arthritis suffers.

20,000 per annum cancer diagnoses.

48,000 people with epilepsy – with over 15,000 who are drug resistant.

But to segment even further, it has been estimated the number of casual cannabis users are 250,000 – which have been quantified by the the Ministry of Health’s as medicinal cannabis users and the core demographic for Greenfern Medicinal.

Competitor Differentiation

Greenfern Medicinal will differentiate itself in the market through a number of initiatives:

Greater focus on environmental sustainability – location next to a hydropower station and ability to access water and discounted clean green hydropower.

Greenfern Medicinal aims to connect with the local South Taranaki community in terms of economic opportunities for locals.

Greenfern Medicinal places ‘People over Profit’ – dedicated to giving back to the community, industry and New Zealand people to benefit their lives.

Greenfern Medicinal is committed to long term growth – as per the segmentation of a future recreational market (as the law allows).

Research and development are of focus with regards to breeding stock.

Export potential will be explored as the business gains a foothold in the market.

Greenfern Medicinal will build a reputation for quality, trust, professionalism and reliability, this will become the backbone of the business. Greenfern Medicinal aims to position itself in the marketplace as a company that delivers and continually exceeds customer expectations. This will be the company’s core strength, which will be backed up by effective business management systems.

Management Systems

Human Resources

The following organisation chart outlines the staff requirement for the business immediately and over time.

Staff will be selected on the basis of experience and qualifications – with emphasis on their appropriateness for the position, honesty, integrity and enthusiasm. Greenfern Medicinal will come to depend upon the talent and experience of its staff. The ability to engage and retain talented and experienced personnel is fundamental to the long-term vision for the Company to achieve its objectives.

Corporate Governance

To ensure that Greenfern Medicinal delivers on its promise to all stakeholders (investors, suppliers, industry etc.) the company will follow a Business Management System (“BMS”) that complies with all industry standards. The BMS will provide the framework for a continued review and improvement process of Greenfern Medicinal. Continuous improvement and corporate governance being a key objective. Policies will be developed in relation to all key areas of the Company’s operation, setting out specific objectives and aspirations and how they are to be achieved. Formalised processes, toolkits and pro-forma documentation will ensure that quality is delivered.

Greenfern Medicinal will implement a computer-based financial management system that will allow sales and marketing activities to be reviewed on a regular basis, as well as to analyse the profitability of the business.

With this system Greenfern Medicinal aims to:

Excel at customer relationship management – full visibility of the project pipeline.

Provide the customer with competitively priced products.

Manage the order fulfilment process.

Plan and manage activities with great effectiveness.

Analyse for ROI of operational spend.

Ensure KPI’s are met with regards to company goals and profitability expectations.

Supply Chain

Greenfern Medicinal will build its reputation in the industry for excellence, quality and service. This will be achieved through a dedication to providing a professional approach to service and producing a product of utmost quality. From seed to product to supply, innovation will be at the centre of all operations, primarily through Blockchain technology which tracks each plant as it moves through the cultivation process.

All plants will be given a unique identifier and information about them will be stored in a shared distributed ledger accessible by other systems to automate maintenance and management. Greenfern Medicinal’s Blockchain technology will also create detailed records with regards to the number of plants grown, the date sowed and reaped, and the weight harvested or destroyed. This will ensure visibility, transparency and accountability for each and every product manufactured under the Greenfern brand – forming the very basis of the company’s corporate governance and compliance policy.

Business Premises

Premises are located at the Normanby Power Station and this is leased from Renewable Power Ltd. There is also a power purchase agreement for Greenfern to purchase renewable electricity at discounted prices.

 

Strategic Plan

Brand Strategy

Greenfern Medicinal will be the epitome of a lifestyle brand – one that enhances the lives of those who use its products. The logo signifies its brand intent – as a medicinal cannabis company that exists as a natural, pure NZ alternative to pharmaceuticals.

Greenfern Medicinal places ‘People over Profit’ – dedicated to giving back to the community, industry and New Zealand people to benefit their lives.

As a brand “For the People”, the intent is to create and communicate Greenfern Medicinal as being a solution that is for everyone – a pure, natural, effective and affordable pain management solution that is designed to cater to and benefit people’s lifestyles.

Vision Statement

“Our vision is to become a New Zealand regional hub for the commercialisation of world class medicinal and therapeutic cannabis products. We envisage being a leader in the transfer of knowledge and stimulation of increased interest in cannabis science nationwide through our ongoing R&D activities.”

“Our goal is to be a major player in the medicinal cannabis market and through achieving our financial goals we will become a major player in New Zealand.”

“Our company will embody fairness, understanding and generosity. Taking responsibility for our actions will give our efforts a sense of purpose and meaning beyond our basic financial goals.”

Mission Statement

“We envisage a world where we help people to live the way they want, pain free and without judgement.”

“Our mission is to provide a safe and legal avenue for patients to receive treatment using medicinal cannabis products that enhance their lives and their lifestyles. We want to help suffering New Zealanders who seek an alternative, more holistic approach to their medication intake. We want to be cost effective, breed and grow high quality medicinal grade strains and manufacture oil that is the base for a range of medicinal products that Kiwis can afford.”

“We will accomplish our mission by:

Staying true to our brand and its operational concept.

Focusing on quality and results.

Maintaining flexibility to adapt to customer needs.

Remaining compliant and professional in our operation.

Ensuring we have qualified trained and professional staff.

Keeping our promises.”

“We commit to running our business based on our core values:

Accessible medicinal cannabis (products aligned to industry sectors).

Quality & professionalism in all we do (high standards).

Continuous improvement & innovation (a mediocrity-free environment).

RICH action (Respect, Integrity, Intentionality, Caring, Honesty, Humility).

Placing value on our customers – service first focus.”

– Greenfern Medicinal Marijuana Ltd

Go-to-Market Strategy

There is a fundamental shift in the way that consumers are looking at and engaging with a brand. Gone are the days where a brand spoke and customers listened. Now more than ever, when customers speak, the brand has to listen in order to create a product or a service that the customer actually wants. Today’s brands need to be part of the Engagement Economy; engaging with consumers and empowering them to drive brand advocacy and sales.

Greenfern Medicinal’s Go-to-Market Strategy taps into the concept of the Engagement Economy. In the Engagement Economy, it is all about building personalised, authentic relationships with customers – communicating with them the way they want, when they want, how they want, on the right channel, and at exactly the right moment.

Greenfern Medicinal will drive customer engagement by collaborating with social media influencers to promote the brand. The management team have the ability to target these influencers by leveraging their expansive networks that provide access to both the trade and consumer network:

Sales Channel. The management team has access to numerous trade networks that allow this channel to be established, however, a channel management strategy will be implemented to ensure that the channel is adequately supported e.g. order visibility, point-of-sale support, brand support, stockist links etc.

Consumer level. Marketing activities will primarily be undertaken via social media and online marketing to reach a brand advocate customer base through influencer marketing techniques. There are already over 8,800 followers on Facebook, which allows for direct communication with the target market. There will also be engagement with leading influencers such as possible former all Blacks and / or sports stars to promote Greenfern through their social media networks – the goal is to ‘go viral’.

By leveraging these networks, Greenfern’s social media uploads will reach hundreds of thousands of followers immediately and provide Greenfern Medicinal with instant notoriety – the beginnings of the Engagement Economy.

Greenfern Medicinal will present to market with a three-phased strategy:

Pre-launch. Implementation of the Go-to-Market Strategy: engaging with the potential sales channel and social media influencers (potentially current or former household name sports celebrities that suffer pain from sporting injuries and see the benefits of our products) through multiple channels (as above).

Launch. Once licensed Greenfern Medicinal will formally launch by broadcasting throughout the social media network, engaging media and working directly with the sales channel in joint product promotions.

Growth. Implementation of the marketing strategy (below) to grow brand advocates and enhance the network of Greenfern Medicinal customers.

Marketing Activities

A Marketing Plan will be created to breakdown all activities undertaken for a 12-month period, considering activities such as:

Social Media

Greenfern Medicinal will invest heavily into social media and the creation of an online community, as this will be the most successful vehicle to communicate with and interact with brand followers. The social media strategy will be considered by using the acronym

POST:

P = People. Who are We trying to engage?

O = Objectives. What are We trying to achieve?

S = Strategies. What will it look like when We are done?

T = Technologies. What are the tools We plan to use?

The following are key social media tactics to support the brand:

Influencer engagement – 8,800+ Facebook followers and notable current or former sports stars that align to our company values.

Facebook. E.g. success stories, product updates, stockist info, product benefits.

Instagram/Snapchat. Encouraging #selfie uploads with branded products.

YouTube. Green cultivation video uploads.

Constant social media broadcasts – motivational messages.

SEO and email marketing.

QR codes in marketing to link to the website.

Website

The website already exists. Once updated the final website will include:

The Greenfern Medicinal story.

The Greenfern Medicinal difference.

Medicinal Cannabis education learning centre.

Product information/benefits – why us.

Contact us page and location information.

Stockists links.

Blog.

Online Marketing

Google Adwords.

Online l ead generation.

Pay per click and paid ads.

Sponso red ads.

Search Engine Optimisation (SEO) to drive organic traffic to the website.

Content optimisation for mobile devices.

A blog that is updated regularly – this links well to SEO, Google places higher importance on websites that are regularly updated.

Claim Google Places Page.

Links to online reviews – Google+ etc.

Google analytics analysis.

Online directory listings.

Facebook ads.

Brand Awareness

Traditional Media:

Vehicle/venue signage, business cards etc

Brochures/fliers

Outdoor signage

Article writing

Newspaper advertising

Community newsletters.

Networking:

Trade shows

Health networks

Brochure mail outs

Promotions with stockists.

Public Relations:

Press releases and media coverage (self and industry generated)

Testimonials • Sponsorships

Media at launch.

Greenfern Medicinal will utilise a B2B operation, however, the intention is to ensure brand visibility at consumer level in order to create a 360-degree sales and marketing strategy that will result in:

A ‘Pull’ from consumers to request Greenfern products from suppliers.

A ‘Push’ from suppliers actively promoting the Greenfern brand to consumers.

The go-to-market strategy has been designed to build up brand loyalty from the very beginning.

 

Risk Management

The Greenfern team are experienced in multiple fields and industries and have a diverse range of skillsets which will be utilised in order to mitigate and minimise the impact of any risks materialising.

Risk

 

Law change isn’t made within 12 months

In order to maintain traction, Greenfern will apply for the already existing licence to cultivate Cannabis for research purposes. This will allow the facility construction and other company operations to continue until the law change is made.

Necessary consents and licences are not secured

We plan to have state of the art traceability and security systems, our location is rural and 3 other companies in New Zealand have the cultivation licence already. A Greenfern advisor and shareholder currently holds an Industrial Hemp Growing licence and has been through the MoH application process. This experience will be leveraged for obtaining the required licences.

The risk of losing key personnel.

Greenfern’s culture will be one that will make it a tough decision for key personnel to want to leave. However, as this does happen, all processes will be documented, and skills will be transferred among key Greenfern positions using job rotation. An annual review of job satisfaction and a skill gap

analysis will be conducted to ensure knowledge and skills are up to date and transferable.

Unable to recruit key staff

Strong demand exists for wanting to work in this emerging industry. We feel we will be able to attract the right skill sets and people needed for the range of roles required. Additionally, we will work with Universities and Horticultural Training Institutions to create work experience programs and placement opportunities.

Problems with the construction of the facility

One Director is a Project Manager in the Civil Engineering sector and another is a Commercial Electrician. Together they have over 30 years industry experience in construction and building fit out. Another advisor has been involved in the construction and development of indoor growing facilities in Colorado, USA.

Not enough land to meet demand

Substantial land is suitable and available in the Taranaki region. Large land owners have already approached us interested in using their land.

 

Business Finances

Use of funds

If we achieve our minimum crowdfund raise amount, we will build a facility with a smaller initial footprint while carefully managing all overhead costs. The maximum raise will allow us to build a larger sized facility and invest more into sales, research and development and efficient processes over a 2-year timeframe.

Purpose

$500,000

(minimum)

$2,000,000

(maximum)

 

Year 1

Year 1

Year 2

Facility Setup

$250,000

$250,000

$540,000

Research and Development

$50,000

$125,000

$125,000

Cultivation costs

$150,000

$330,000

$330,000

Administrative Costs and Working Capital

$25,000

$85,000

$85,000

Capital raising costs

$25,000

$130,000

$0

Total Investment

$500,000

$920,000

$1,080,000

 

$2,000,000

 

Financial Forecasts

Forecasts have been prepared for the first year of trading, with projections for years 2 and 3 based on growth in the number of plants cultivated and oil extracted.

These financials have been based on best market research and validation available at this present time given it is a new industry that still needs to be established and regulated.

Growth is expected as regulation takes hold, the industry becomes established, new market segments open-up and facilities are expanded.

Financials for $500,000 (minimum) raised:

 

2019

2020

2021

2022

Investment and Capital Expenditure

Crowdfunding Investors

500,000

 

 

 

Total Investment

500,000

 

 

 

Capital Expenditure

-500,000

 

 

 

Profit and Loss Forecast

Revenue

0

928,625

1,392,937

1,857,600

Costs of Goods Sold

0

204,297

306,446

501,552

Gross Profit

0

724,328

1,086,491

1,356,048

Gross Margin

0

78%

78%

73%

Operating Costs

0

280,562

322,118

428,407

EBITDA

0

443,766

764,373

927,641

Net Profit

0

443,765

764,373

927,6413

Net Profit/Loss Margin

0

48%

55%

50%

Cashflow Forecast

Total Investment

500,000

 

 

 

Capital Expenditure

-500,000

0

0

 

EBITDA

0

443,766

764,373

927,641

Tax

0

-124,254

-214,024

-259,739

Net Cash Flow

0

319,512

550,349

667,902

 

Financials for $2,000,000 (maximum) raised:

 

2019

2020

2021

2022

Investment and Capital Expenditure

Crowdfunding Investors

2,000,000

 

 

 

Total Investment

2,000,000

 

 

 

Capital Expenditure

-920,000

-1,080,000

 

 

Profit and Loss Forecast

Revenue

0

1,392,937

2,322,000

3,250,800

Costs of Goods Sold

0

306,446

626,940

877,716

Gross Profit

0

1,086,491

1,695,060

2,373,084

Gross Margin

0

78%

73%

73%

Operating Costs

0

322,118

376,908

492,146

EBITDA

0

764,373

1,318,152

1,880,938

Net Profit

0

764,373

1,318,152

1,880,938

Net Profit/Loss Margin

0

55%

57%

58%

Cashflow Forecast

Total Investment

2,000,000

 

 

 

Capital Expenditure

-920,000

-1,080,000

 

 

EBITDA

0

764,373

1,318,152

1,880,938

Tax

0

-214,024

-369,083

-526,663

Net Cash Flow

1,080,000

550,349

949,069

1,354,275

 

Assumptions

Any projected returns and revenue are based on a range of assumptions including but not limited to:

Legislation is passed allowing Greenfern to commercially produce medicinal cannabis oils and products

Growing facility is built without major roadblocks on site at the Hydro power station

Heavily discounted (against retail commercial prices) power prices are sustained

Wholesale sales channels are created

Greenfern acquires the licences required to operate as per the business plan

Greenfern occupying space at the Hydro power station

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