Collie-based medicinal cannabis startup Cannaponics founder and managing director Rod Zakostelsky.
Cannaponics, a medicinal cannabis manufacturer based in Western Australia, is preparing for an initial public offering (IPO) on the Australian Securities Exchange later this year. The company aims to capitalize on the rapidly expanding legal cannabis market, which is projected to exceed $150 billion globally by 2030.
The firm, led by Rod Zakostelsky, plans to produce 15,000 tonnes of medicinal cannabis annually, including dried flowers and oil, at its 165-acre facility located in Collie, South West Australia. The first harvest is anticipated in March or April 2024. Zakostelsky noted that the IPO is scheduled for the second half of the year.
To reinforce the company’s financial stability, Zakostelsky has diversified revenue streams. This includes the strategic acquisition of the Club Hotel Collie for $550,000. This property features 21 rooms, three bars, and a bottle shop, which Zakostelsky purchased in response to concerns about a housing crisis in the region impacting staff recruitment and retention.
Following the acquisition, the hotel has begun catering to local mining workers, which has nearly doubled its revenue to $6 million. Plans are underway to expand the hotel with an additional 48 rooms, potentially increasing annual revenue to $14 million. “We have diversified within the company to combat any future challenges that we may face within the industry,” Zakostelsky stated. He anticipates significant consolidation in the cannabis sector over the next 12 to 36 months.
The optimism surrounding the market is buoyed by several industry analyses forecasting that the global legal cannabis market will reach approximately $102 billion ($152.4 billion) by 2030. Zakostelsky highlighted, “We’re one of only half-a-dozen growers here in the country at the scale that we have, so for us it’s exciting to be part of that.”
In preparation for the IPO, Cannaponics has engaged stockbroking firm Morgans as the lead manager and advisers. This announcement comes shortly after a significant policy change in the United States, where President Donald Trump signed an executive order reclassifying cannabis from a Schedule I drug to a Schedule III drug. This adjustment aligns cannabis with certain prescription painkillers, potentially broadening access within the US market.
As Cannaponics gears up for its IPO, the focus remains on establishing itself as a key player in the burgeoning medicinal cannabis sector while ensuring sustainable growth through diversified business strategies.
