Chch-based medical cannabis company in administration

Tuesday, 26 November 2024

Medical Kiwi found and executive chair Aldo Miccio had talked up the company’s prospects as recently as March.

A Christchurch medicinal cannabis company previously fined by a financial watchdog and admonished by its own auditor has been placed in voluntary administration.

Medical Kiwi Ltd, now known as Aether Pacific Pharmaceuticals, entered administration on Thursday. It employs around 15 people and its executive chair, Aldo Miccio, is a former mayor of Nelson. Christchurch city councillor James Gough was among its directors until he stepped down last year.

The company, which touted itself as a “pioneering research and wellness company, creating and distributing medicinal and nutraceutical cannabis products” had endured revenue and growth problems for the last two years. In its annual report for the year to June 2022 its own auditor noted: “If the capital raise and revenue growth targets are not achieved in the short term, the going concern assumption may not be appropriate and therefore the company may be unable to realise its assets and discharge its liabilities in the normal course of business.”

Medical Kiwi Ltd’s Christchurch premises appeared locked and unattended on Monday.

The current state of its finances is unclear (Neither Miccio or foundation director Peter Win immediately responded to requests for comment on Monday) but its draft annual report for 2022-23, obtained by The Press, showed it incurred a loss of $5.8 million and just $453,408 in sales that financial year. This followed a confirmed $7.8m loss in the 15 months to June 2022, which prompted the adverse auditor’s report.

Despite the uncertainty, the company had remained bullish about its prospects, forecasting revenue growth to $10.4m by April this year. In December, Miccio, a former mayor of Nelson, told The Press: “We have commitments from [anchor investors] to fund shortfalls when needed so there is no chance of us closing our doors in the foreseeable future.” He and Win had sold 2.6m of their shares in the company between May and June 2021 netting $1.08m each, but that money had gone back into the company, he said.

Do you know more? Contact The Press at reporters@press.co.nz

A car registered to the company was visible in a driveway at its premises.

In March, Medical Kiwi announced its dried flower cannabis products were available in Australian pharmacies. “Not only does the region have the potential to unlock significant sales for the group,” Miccio said at the time, “It is also an important step in our international expansion strategy.”

The company hoped to achieve an industry certification for growing standards (GMP) by March this year, which would allow it to produce at full capacity across six growing rooms and command a higher price. The Press understands it had not achieved this, and in recent months had been growing around 300 plants at a time across two growing rooms at its premises in Wigram. On Monday, the site appeared locked, with gates and barbed wire preventing entry. A company car with a flat tyre was visible in a driveway.

In 2021 Medical Kiwi was denied an NZX sharemarket listing and then ran afoul of the Financial Markets Authority over claims it made during a capital raising on crowdfunding platform PledgeMe the year before. These included that it had a “cannabis licence” when it was due to expire and omitting that other licences were required to legally produce medical cannabis. The company apologised, paid a $250,000 fine and offered to refund participating shareholders.