Medical cannabis company Cannaponics has raised a record-equalling $5 million – the maximum allowed under Australian law – in an equity crowdfunding campaign via Birchal.
The campaign for the West Australian startup lasted just two weeks with 2,771 investors buying in. The only other company to raise the $5 million maximum was Byron Bay’s plastics reduction startup Zero Co in 2021.
It’s the largest raise for any medical cannabis-related company, and the round is 10 times the size of the original minimum of $500,000, which was raised in less than 30 minutes after the campaign’s opening. It hit $3 million within 24 hours.
Cannaponics founder and CEO Rod Zakostelsk said they were blown away by the response from investors.
“We’re a feel-good company and want to do things differently. Everything – from our sustainable operations to our hiring approach to our pursuit of creating an affordable supply chain for customers – is built around the idea that we want to lift the industry up, and be the Australian leaders in both quality and quantity,” he said.
“We have the team, the tech and the expertise to change the industry and now we have the backing of more than 2770 Australian investors to make it happen soon. We’re so thrilled with the results and so happy to welcome our new investors.”
The fresh capital is earmarked for developing the company’s 67-hectare site in southwest WA, which includes a 4,000sqm greenhouse, to ramp up production. The greenhouse allows year-round production.
Around half of current medicinal cannabis is imported, with prescriptions demand predicted to hit 30,000kg by 2024.
Birchal CEO Matt Vitale said the Cannaponics result shows that despite current concerns, it is a good time to raise capital.
“We’re seeing large numbers of investors motivated to back Australian innovators like Cannaponics as they carve out opportunities in growth industries, like plant-based medicines,” he said.
“Maxing out at $5 million is both testament to the hard work and entrepreneurialism of the Cannaponics team, and a sign of broader market interest in the category.”