Defunct medicinal cannabis company finds a buyer

The operations of failed medicinal cannabis company Helius Therapeutics have been snapped up by another industry player.

Helius Therapeutics went into voluntary administration and closed its manufacturing plant in Auckland in March, citing continuing trading losses driven by high operating costs and a tough regulatory environment.

Medicinal cannabis grower Ora Pharm announced on Wednesday that it had bought the Helius business and its assets for a confidential sum.

Chief executive Zoe Reece said the company had been planning to build its own manufacturing facility closer to its grower network but the purchase of the Helius plant allowed it to get started right away.

"We have deep expertise and experience in the medicinal cannabis space, and New Zealand has some incredible regulations for medicinal cannabis," Reece said.

"I definitely saw this as an opportunity for us to really integrate both our experience and expertise with this incredible asset to be able to move manufacturing forward and create opportunity under this integrated business model."

The deal makes Ora Pharm the largest end-to-end medicinal cannabis supply chain company in New Zealand, in the wake a string of failed start-ups in the sector. It said it had retained a few key staff members from Helius' manufacturing operation, with the remainder of roles filled by its own workforce.

The company had to jump through a few regulatory hoops before it could complete the purchase, Reece said.

"We put a competitive bid in and that was accepted, and so then we needed to meet the conditions, which included us applying for a new licence, or two new licences."

Asked whether New Zealand's regulatory environment was still making it tough for start-ups, Reece said her experience in the US gave her a different perspective on the local environment.

"I was able to learn and understand all of the different types of regulations that they had there, and each state was like their own little little country, and so I have always said how incredible the New Zealand regulations are.

"Yes, they are stringent, but we do need to remember that this is medicine for patients, and so it needs to be to the same standard as other pharmaceutical medication."

Companies had been acting in isolation, Reece said, and Ora Pharm was looking at ways to build some common infrastructure for everyone to use to make businesses more efficient.

"Which then makes the New Zealand industry extremely strong on the global stage, and so that's where we work with lots of different growers, and we'll be looking to build and create regional hubs which can support that."

The company said it intended to resume supply of products to patients soon.