Cannabis Doctors Australia launch crowdfunding campaign with big ambitions
Written on the 16 May 2019 by David Simmons
The minds behind fast-moving medicinal cannabis clinic chain Cannabis Doctors Australia (CDA) have big plans for their venture, and they begin today with an Australian-first crowdfunding campaign.
CDA is the first medicinal cannabis company in Australia to embark on an equity crowdfunding campaign since the method of capital raising was legalised in September 2018.
The business is raising funds to initially expand its clinics around Australia, but its ambitions are broader than just that.
The group also hopes to not only be the first wholesaler and chain of medicinal clinics in Australia, but also one of the first Australian-based manufacturers of medicinal cannabis.
The group's crowdfunding campaign is now live on equity crowdfunding platform PledgeMe.
Investors are already excited about CDA, with $1 million already raised since pre-registration opened in March. The company aims to reach a target of $2 million by the end of the campaign.
CDA was formed in October 2018 by Dr Matua Jansen (pictured right), a former hospital oncology specialist, and his cousin, medical director, Dr Ben Jansen (pictured left), who is currently a registered general practitioner and holds a fellowship in urgent care in Australia and New Zealand.
Dr Ben Jansen says the company went down the road of crowdfunding, rather than an IPO that other cannabis companies have decided to tackle, for two main reasons.
"We wanted to bring the local community and family and friends who have been on this journey with us for a while into the business, they've always wanted to be a part of it," says Dr Ben Jansen.
"We wanted to offer it to them first and we wanted to do that in a succinct and sustainable fashion."
"At this stage an IPO is too early and not that beneficial for us. A lot of companies that have gone through the IPO are just burning money at the gate and have very little planning done."
"Right now is the beginning of the hockey stick for us which is very exciting for us, and for Australia as well."
While now might not be the right time for an IPO, listing on the ASX is on the cards for CDA. The company says they are aiming to list in about 18 month's time.
CDA Managing Director, Dr Matua Jansen, said the company opted for an equity crowdfunding campaign to stay true to its patient-focused values, while also maintaining independence from large pharmaceutical companies.
"Equity crowdfunding was always on the agenda for us," says Dr Matua Jansen.
"After careful consideration, we believe it is the best way for us to maintain our integrity and control of the company for the sake of our doctors, staff, shareholders and, most of all, our patients."
"CDA has been approached by several companies and private investors offering to buy us out or buy in, but they have been focused on the short-term profits to be made in what is seen as a rapidly growing industry. Not once in any of these conversations did anyone mention what is best for the patient."
"What we have seen many times before is large multinational conglomerates moving into the Australian market and increasing the price of medicinal cannabis, which obviously isn't in the best interests of the patient."
"CDA is entering a significant growth phase and our plan is to offer the company to the public which is perfect for us and in-line with our values of providing the community with access to safe, affordable and reliable plant-based medicines and services."
"This is the perfect opportunity for investors to get in at the first funding round of a progressive, patient-focused medical cannabis company that aims to change the paradigm of healthcare in Australasia."
While the company has already prescribed into every state and territory of Australia (bar Tasmania) thanks to telehealth it wants to have a physical presence in every major city.
The raise will allow the business to bring on more doctors, establish a presence, and ultimately allow the company to apply for a manufacturing licence to cultivate their own product.
"We want to be Australia's leading medicinal cannabis company," says Dr Ben Jansen.
"Being patient focused is key to that. We want to develop from there by going into manufacturing."
"CDA has already worked hard to bring the prices down for consultations and products, but our aim is to diversify further and obtain a licence to manufacture and cultivate medicinal cannabis, which will help us to further bring down the prices for patients."
"Australia and New Zealand are facing a huge opioid epidemic due to overuse of prescriptions and yet alternative treatments, such as medicinal cannabis, still have a huge amount of stigma attached to them."
"It is our mission to inform patients and the medical community that medicinal cannabis is a safe, affordable and reliable alternative to opioids."
Since CDA opened its first clinic on the Gold Coast, the company has facilitated nearly a third of all recent medicinal cannabis approvals in Australia, with more than 700 patients receiving over 1500 prescriptions for treatment products including CBD, THC, and cannabis crystals, flowers and oils.
The clinics' current patients, who range from six to 96 years old, suffer from 22 diagnosed conditions, including cancer pain and related symptoms, fibromyalgia, osteoarthritis, back pain, migraines, anxiety and mood disorders, epilepsy and autism.
The company currently has two sites on the Gold Coast, one in Brisbane, and one in Melbourne.
The group also owns New Zealand company, Cannabis Doctors Aotearoa, which plans to implement the proven Australian business model in the emerging New Zealand market, and Healthy Not High, a hemp-based food and beverage company.
Business News Australia
Author: David Simmons