Companies will look to bring more than 100 jobs to a struggling town if the production of medicinal cannabis becomes legalised.
As New Zealand prepares to legalize the production of medicinal cannabis, companies are racing to secure the first and biggest slices of a market that has proved lucrative in the United States and Canada.
One of those companies is also racing to save the town of Ruatoria, population 750 and falling.
“You’ve got whole entire families leaving because there’s no work and it’s a struggle to live,” said Donette Kupenga, owner of Ruatoria’s only cafe, Hati Nati. “Employment would make a huge difference.”
And so Kupenga, like hundreds of other residents of Ruatoria and nearby towns, became a shareholder in Hikurangi Cannabis, a startup founded by two local men, Manu Caddie and Panapa Ehau. They say they want to bring more than 100 jobs to the area in the next two years.
Besides benefiting the town (and themselves), the founders have another goal: ensuring that Maori, the indigenous people of New Zealand — who make up 95 per cent of Ruatoria’s population — share in the economic gains from the medicinal cannabis industry.
“Our Indigenous people here are the masters of growing marijuana,” said Robin Thomson, 54, a grower for Hikurangi, referring to flourishing illegal operations in the area.
Ruatoria, on the East Coast of New Zealand’s North Island, is two hours’ drive from the nearest city, Gisborne, on a highway battered by the logging trucks that provide much of the area’s employment.
Phone reception is patchy, the last retail bank closed in 2015, and the gas station is shuttered. Jobs outside of farming and forestry are increasingly hard to find; unemployment is about 15 per cent, and the median annual wage is 17,000 New Zealand dollars, or $11,500, which is below the national poverty line.
“I don’t think the number of locals can sustain our township,” said Kupenga, the owner of Hati Nati. (The really tough months for the cafe, she says, are April to November).
So when Caddie and Ehau began holding public meetings this year to solicit investment, their message — offering jobs and a chance to reverse the town’s fortunes — found an eager audience. They sold more than one million dollars in shares to area residents (often in 50-dollar bundles, the minimum purchase).
“They all say they want to move home if there’s a decent job,” said Caddie, 45, referring to people who have left Ruatoria. “So we’re creating some decent jobs, and we’ll see how relevant people’s talk is.”
Many people in Ruatoria say they have stayed because of deep connections to the land and their community. Most speak the Maori language, and many serve at their local marae (a communal meeting place). The unspoiled scenery is ancestral Maori land, much of it now owned by family collectives.
Caddie, a former district councillor and youth worker, has led community development projects before, but this is his most ambitious. Hikurangi Cannabis, which currently employs 10 people, wants to create 120 jobs in Ruatoria in the next two years and eventually double the town’s income, Ehau said.
Besides the shares sold to local residents, Hikurangi raised a further two million dollars through crowdfunding, and institutional investors with deeper pockets have also bought in.
The company was the first in New Zealand to obtain a license to breed cannabis strains for eventual use in medicines; currently, it can only sell its product overseas for research and clinical trials while it waits for medicinal cannabis production in New Zealand to become legal. Parliament is expected to pass that legislation by March, though the law would not take effect until 2020. (New Zealand’s government has also promised a referendum on legalizing recreational cannabis use before the 2020 election.)
Hikurangi has partnered with a local technical school to create New Zealand’s first government-recognised certification program for growing hemp, which has attracted students to Ruatoria from around the region.
On a recent day in October, a small team of growers and students were getting ready to plant hemp seeds at one of the Hikurangi plots. It was done in keeping with “the old ways” of local Maori; the potting mix, fertiliser and pest control were created from organic materials, and planting was guided by the phases of the moon.
“I’ve been growing marijuana since I was 14,” said Thomson, the grower for Hikurangi, who is one of the course’s tutors.
Thomson said he had spent six years in prison on marijuana charges, but he had not been in trouble with the law for 14 years. Now he was welcoming other Maori growers into the hemp course as students — giving them a chance, after years of “hiding in the bush,” to certify the expertise they acquired from their parents or grandparents.
But Thomson feared Maori growers with criminal records, like himself, would be locked out of the new industry.
That would echo what critics see as racial injustice in the US cannabis industry, where most dispensary owners are white, and black Americans — who, like Maori in New Zealand, have long been prosecuted and jailed for marijuana offences at a disproportionately high rate — often cannot get jobs because of past convictions.
Hikurangi is lobbying the government to let people with marijuana records work in the new industry. “I really want, if the law passes, to get a clean slate,” Thomson said.
Caddie and Ehau hope to open a processing facility in Ruatoria next year, but they say that if they cannot find a suitable site they will look in the nearest city. That, they admitted, would be a blow to their dream of economic development at home.
“We’ve got funds in the bank and we want to get on with things, but we have to get on with it now,” Caddie said, referring to the rush of companies hoping to cash in on the medicinal cannabis law.
Hikurangi holds meetings with its investors at each major step, including a recent decision to list the company on the stock exchange next year. The founders had not initially planned to take the company public, but Hikurangi’s institutional investors warned they would be “left in the dust” if they did not. The locals, Caddie said, were supportive of the move.
Caddie’s 71-year-old next-door neighbour, Nanny Lucky, was the first to sign up when Hikurangi began offering shares to locals. Pulling together the 50-dollar minimum investment was a challenge, but she said she wanted to support the “bloody brilliant” idea.
“It’s not me you want to worry about, it’s the younger generation,” she said, adding that unemployment in the area had fueled burglaries and methamphetamine use.
Kupenga, the cafe owner, initially opposed the plan, saying marijuana use had badly affected her family. But she and others changed their minds after learning about the drug’s medicinal benefits.
“I started pushing for my family to get involved; it’s affordable, so it’s a step up for everyone,” she said. “Now I can see my cousins talking about shares. That would never be a conversation they had previously.”
Residents of Ruatoria said companies had arrived promising jobs and economic growth before and had left without delivering. But they trusted Hikurangi’s directors because they were locals.
“We’re grounded here,” Caddie said. “Someday I’ll be buried up on the hill there. I can’t imagine going anywhere else.”