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Perth-based Phytotech, due to list on the Australian
Securities Exchange on Dec. 22, is seeking to raise A$5 million
($4.2 million). Founder and executive director Ross Smith said
investors - some from as far afield as Russia and the United
States - have already asked for shares worth $A15 million.
"South of the equator there's nothing available in the medicinal
cannabis sphere," Smith told Reuters by telephone. "We're going
to close it early because it's so massively oversubscribed."
Smith set up Phytotech in August to sell medicinal marijuana and
develop a disposable device to inhale the drug. He envisions any
advertising for the products to run along the lines of the ads
for Nestle Nespresso coffee machines that feature Clooney.
"I'd be on the shore of Lake Como, puffing away and two
beautiful women would come up and say, 'Is that a Phytotech?'
and I'd say 'Why, yes'," Smith said with a laugh.
According to the IPO prospectus filed with the stock market
regulator, Phytotech plans to grow medicinal grade marijuana in
Israel, the only country that allows exports of the drug, for
sale in the United States, Canada and Europe.
It is also positioning itself for possible changes in Australia,
where the cultivation and sale of cannabis are banned. There are
trials to grow medical cannabis in a couple of states and
legislation to allow its sale is before parliament.
Phytotech priced its IPO at A$0.20 a share, the minimum issue
price stipulated by the Australian Securities Exchange. It is
offering 25 million shares.
"It is priced for risk," Smith said. "But if we don't list at
A$50 million plus on debut, I'll be very surprised."
Shares in companies offering medicinal marijuana have already
proved a hit in the United States, giving rise to a so-called
"dot bong" boom. Around 20 countries and scores of U.S. states
have legalized medical cannabis use.
Smith, 51, who was convicted for possessing and cultivating
marijuana in 1989, said the idea for the business came to him
when he was offered medicinal grade marijuana while hiking in
New Zealand last year.
"I'd broken my back previously and with a few puffs I could walk
up and down mountains easily, carrying a heavy rifle and a deer
or pig or whatever," he said.
(Editing by Miral Fahmy)
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