Medical cannabis company Cannaponics raised a record $5 million through Birchal – the maximum allowed under Australian law – in an equity crowdfunding campaign.
The campaign for the Western Australian startup lasted just two weeks and 2,771 investors bought in. The only other company to raise the $5 million maximum was Byron Bay’s plastic reduction startup Zero Co in 2021.
It’s the largest raise for any medical cannabis business, and the round is 10 times the original $500,000 minimum, which was raised in less than 30 minutes after the campaign opened. It reached $3 million within 24 hours.
Cannaponics founder and CEO Rod Zakostelsk said they were impressed with the response from investors.
“We are a feel-good company and want to do things differently. Everything – from our sustainable operations to our recruitment approach to our commitment to creating an affordable supply chain for customers – is built around the idea that we want to take the industry to the next level and be the Australian leaders in both quality and quantity.” he said. .
“We have the team, technology and expertise to change the industry and now we have the support of over 2770 Australian investors to make it happen quickly. We are so pleased with the results and so happy to welcome our new investors.”
The fresh capital is earmarked for developing the company’s 67-acre site in southwest WA, including a 4,000-square-foot greenhouse, to ramp up production. The greenhouse makes year-round production possible.
About half of current medical cannabis is imported and demand for prescriptions is expected to reach 30,000 kg by 2024.
Matt Vitale, CEO of Birchal, said Cannaponics’ result shows that despite the current concerns, now is a good time to raise capital.
“We see that large numbers of investors are motivated to support Australian innovators like Cannaponics while creating opportunities in growth industries, such as plant-based medicines,” he said.
“Maximum $5 million is both a testament to the hard work and entrepreneurship of the Cannaponics team, and a sign of wider market interest in the category.”