Brisbane firm Fiji Kava has just inked a deal with Coles and raised $2.3 million

The world’s first listed kava firm is based in Brisbane and has just had a huge week, with a major distribution deal and a $2.3 million capital raising.

Kava Root at a Kava Market in Fiji.

CRACKING WEEK

It’s been a cracking week for Fiji Kava, the Brisbane-based outfit with the distinction of being the world’s first listed company making products from the revered plant that has suddenly become very trendy.

The start-up has just inked a deal with Coles, which will see up to 800 stores across the nation carry existing Fiji Kava extract capsules and three new varieties, all aimed at promoting sleep, soothing nerves and relaxing the mind.

Products will be on store shelves and available online by June, with a manufacturing plant in Fiji set to crank up in the months ahead.

Fiji Kava boss Zane Yoshida.

The company has also completed a $2.3 million capital raising to help propel its growth globally, with footholds already in the US and New Zealand. E-commerce plans for China are likely on hold for obvious reasons.

Boss Zane Yoshida, who grew up in Fiji but has called Brisbane home for 26 years, described the agreement with Coles as “a very significant breakthrough for the company’’ but he declined to speculate yesterday on how it might boost his bottom line.

KAVA BOOM

The root of the kava plant has yielded a bitter, yet slightly narcotic, drink for Pacific islanders for more than 3000 years.

But with the world’s alternative and complementary medicine market, including marijuana, set to swell to more than $US210 billion by 2026, kava has become a hot commodity.

Indeed, the boom has seen more than 200 “kava bars’’ already spring up across the US for those looking to unwind without alcohol.

Spying an opportunity, Fiji Kava launched in 2014 and it now has a 45ha farm with more than 40,000 plants in Fiji, along with tissue culture lab where they are aiming to produce a steady supply of disease-free specimens.

The company, approved by the Fijian government as the only foreign entity of its kind to operate in the industry, floated on the ASX in late 2018 after raising $5.2 million from investors at 20 cents per share.

A kava pill.

It rustled up another $725,000 in convertible notes last December, just two months after signing a “memorandum of understanding’’ with New Zealand pharmacy group Green Cross Health. Fiji Kava products are now featured in up to 200 pharmacies cross NZ.

Then in November last year it snared a coveted place on Amazon, opening up access to the enormous North American market.

In Australia, Fiji Kava has been distributed since late 2019 by Oborne Health Supplies to its network of alternative practitioners, including naturopaths, doctors and health stores.

Naturally, the Coles deal will dramatically lift the company’s exposure into the mainstream and take it to that proverbial “next level’’.

But challenges remain as Fiji Kava keeps chewing through cash.

It has yet to make a profit, reporting a $4.76 million loss in the last financial year and generating just $182,537 in sales revenue. Yoshida would not comment on expected turnover or profit this financial year.

Investors have also taken a bath so far. The stock closed yesterday at just 9 cents, less than half the IPO price.

ANOTHER WIN

Mike Veverka and his gang at Brisbane lotteries outfit Jumbo Interactive have chalked up another win.

The fast-growing company announced this week that it had struck a five-year licensing deal with MS Queensland, the fourth charity operator in 15 months to use its software.

The agreement will help Jumbo Interactive reach an ambitious target of selling $1 billion worth of lottery tickets by the middle of 2022.

Mike Veverka

It has already signed up the Mater and Endeavour Foundation lotteries as part of its new “software-as-a-service” business.

The MS deal comes just days after Jumbo Interactive unveiled a $14.4 million net profit for the December half, up 13.8 per cent. Active customer numbers have more than doubled over the past two year to nearly 850,000.