The investment community’s appetite for the cannabis sector is transitioning from high-cost cultivation and extraction businesses to companies using clinical data to tailor products for specific conditions, an audience has been told.
Speaking at an investor session hosted by Proactive, Zelira Therapeutics CEO Dr Richard Hopkins said lower capex, higher margin companies focused on patient outcomes “represent the future” and would attract more sophisticated funds into the sector.
He said: “It’s true the sector has seen a pullback, but it’s transitioning from a focus on the cultivation/extraction side of the business, which has really become a commodity. And it’s been problematic because of the high capex requirements.”
“We use a hard, scientific approach to generate proprietary formulations where there’s good evidence to support that it works against a specific indication. We are not required to build out expensive infrastructure.”
Hopkins said Zelira’s recent capital raising in which it raised almost A$9m was an indication of ongoing interest from new and existing investors. He said he was particularly excited by the company’s upcoming Australian release of Hope, for autism, and insomnia product Zenivol, as both have proven effective in treating US patients.
“Each one has been positioned in the market to address a specific unmet medical need. We understand what the clinical end point is and the patient requirement.
“In Pennsylvania there’s been a huge take up [of Hope]. It’s got about 20% of the autism market for medicinal cannabis already. We’re expecting it to do similar things around the rest of the globe because it’s positioned well.
“Likewise with insomnia, [Zenivol] has clear material benefit for a number of indications that are linked to medicinal cannabis such as chronic pain.”