Rua Releases Market Insights

PO Box 1387, Gisborne 4040, Aotearoa New Zealand | 0800 RUABIO | www.ruabio.com



FOR PUBLIC RELEASE
NZX Limited
Wellington

Tuesday, 21 March 2023


Rua Releases Market Insights


Rua Bioscience (NZX: RUA) has released its Market Insights for 2023.

The update is designed to share information about the challenges and opportunities presented by
emerging high-value medicinal cannabis markets.

CEO, Paul Naske, says “as we progress conversations and negotiations in Europe, our understanding of
global medicinal cannabis markets evolves. This update provides an opportunity for Rua to share some of
our most recent findings, focusing on Europe, Australia and New Zealand.”

The update is released as the company prepares for the launch of its first medicine in Germany.

Ends.

The person(s) who authorised this announcement:

Paul Naske, Chief Executive Officer

For shareholder enquiries please visit www.ruabio.com, or contact:

Kerry Donovan
Communications and Corporate Affairs Manager
info@ruabio.com
0800 RUABIO

GENERAL RELEASE

---

Medicinal Cannabis Market Insights 2023

Creating cannabinoid-derived
medicines that change people’s lives;
from right here in TeTairāwhiti.
Our Vision

Going Global to
Support Local
From the outset, Rua has understood that we
must go global to support local.
As we supercharge our focus on developing
global revenues, we thought it timely to provide
an overview of key markets both overseas and
here in Aotearoa.
3

4
To date, Rua remains the only NZ-based medicinal cannabis company
with an explicit focus on delivering intergenerational social impact.
Rua was born to create opportunities on the East Coast and support
community access to affordable medicines. As we mature, we
acknowledge the role we can play more broadly:
•encouraging our community to rethink what can be achieved in, by
and for our community.
•inspiring our rangatahi (youth) -the next generation of scientists,
researchers, entrepreneurs, and business leaders.
•supporting the health outcomes of local patients through our
regionally-targeted compassionate access programme.
Entering global markets will secure meaningful revenue so we can
continue prioritising sustainable, intergenerational change on the
East Coast.
It’s all About
Impact

5
The global medicinal cannabis market is projected to grow at a
compound annual growth rate (CAGR ) of 24% between 2023 and
2028 to reachUS$37b
1
.
What’s driving market growth?
•The growing number of countries legalising cannabis for
medicinal use.
•The rising number of R&D projects, clinical trials, and increased
commercialisation of the product.
•The rising population of older patients more vulnerable to
chronic illnesses and likely to suffer from related pain.
•Growing consumer awareness.
It is a dynamic and ever-evolving market. Many countries continue
to consider progression towards legalisation or decriminalisation
of cannabis.Two large markets in particular: Germany has a
proposal to fully legalise cannabis before the EU parliament, and
the US is considering federal legalisation.
Despite this, international marketsparticularly across Europe and
Australasia, are growing rapidly and offer significant opportunities
for those New Zealand companies that can provide consistent,
differentiated, GMP-quality product and develop a strong in-
market sales and marketing presence.
The
picture
can't
be
display
ed.
Key Highlights

6
From the very beginning, Rua has had its eye on the developing
European medicinal cannabis market, which could be worth as much as
NZ$3.9bby 2026
2
.
In addition to Germany, where Rua will soon launch product, there are a
number of higher value countries within which a viable domestic
medicinal cannabis market has been established and where export-
focused companies, like Rua, might expect to expand.
Rua recently signed a five-year supply agreement with Czech
distributor, Motagon, which gives Rua access to high value markets in
Eastern and Central Europe, including Poland and Czechia.
Europe

Germany
Rua’s first German product launch is fast approaching with Rua’s NZ
and German teams working to deliver a seamless market entry.
Established in 2017, Germany is by far the largest and most developed
medicinal cannabis market in Europe.
Here, clinicians can prescribe medicinal cannabis for a variety of
conditions and around 60-70% of those prescriptions are paid for
(reimbursed) by Statutory Health Insurers. Reimbursed sales are
complimented by a substantive private paying market. In Germany,
72% of medicinal dried cannabis flower prescriptions are issued for the
treatment of pain. 77% of those prescriptions are for high THC flower
3
.
To succeed in Germany, companies require differentiated product and a
strong domestic sales and marketing presence. The market shows a lot
of promise. Analysts expect the German market to be worth around
NZ$700mand to have grown to 147,000 patients by the close of 2023
3
,
and to be worth NZ$1.4bby 2025.
7
$1.4b
By 2025
60,000
Currently
372,000
Prescriptions issued in
2021

Poland
The Polish medicinal cannabis market was established in 2017 and is
described as one of the largest and fastest growing markets in Europe.
Though in some instances Polish medicinal cannabis patients have their
prescriptions funded by Statutory Health Insurance, Poland is largely a
private payers market.
With no domestic cultivation, Poland is a major importer of dried flower.
However, maintaining supply can be an issue with product shortages
attributed to restrictive regulations and comprehensive product
auditing. To succeed here you need European-based support and
regulatory expertise, as well as experienced and reliable suppliers.
Despite this, the Polish medicinal cannabis market has been showing
consistent double digit growth. According to proprietary data, the
Polish market could be worth NZ$92mby the close of 2023.
Our work with distributer, Motagon, has positioned us as an early mover
in the Polish market. Within the next 18 -24 months, we expect to be
one of only a few companies with access to this challenging but
potentially lucrative market.
8
$92m
By the close of 2023
4,122
Currently

Czechia
Czechia is one of the most progressive medicinal cannabis markets in
Europe. It has seen steady growth over the last five years, largely thanks
to a comprehensive public reimbursement programme whereby up to
90% of medical cannabis costs are covered by the Government.
In Czechia, doctors with a specialist qualification in areas such as
oncology, neurology and geriatrics can prescribe medicinal cannabis for
specific indications. 87% of the prescriptions issued here are for chronic
pain
2
.
Because the domestic supply chain is relatively immature, Czechia
holds a lot of promise for exporters. Recent reports suggest the Czech
market will be worth NZ$8.4mand to have grown to 7,000 patients by
the end of 2023.
Rua is exploring the opportunities presented by the the Czechian
medicinal cannabis market, alongside our partners at Motagon.
9
$8.4m
By 2023
5,000
Currently
19,500
Prescriptions issued
January to September 2022

The United Kingdom
The UK’s medicinal cannabis market was established in 2018 and has been
driven by a handful of market access and cannabis manufacturing start-
ups. The market relies heavily on imported flower and full spectrum extracts.
The UK’s National Institute for Health and Care Excellence (NICE) has set
strict guidelines around the indications for which medicinal cannabis can be
prescribed. Responsibility for prescriptions lies mostly with individual
doctors, who must be specialists in the field of the indication.
In the UK, medicinal cannabis is prescribed mainly in the treatment of
depression and anxiety, as well as chronic pain and arthritis. The NICE has
approved cannabidiolto treat multiple sclerosis,Dravet andLennox-
GastautSyndromes, for adults experiencing nausea caused
bychemotherapy and Tuberous Sclerosis Complex.
The market is expected to grow to NZ$82.3mand 25,000 patients by the
close of 2023, and could be worth NZ$1.69bin the next seven years
2
.
Rua recently joined leading UK medicinal cannabis firms to fund a key
project analysing the economic benefits of cannabis prescriptions for the
NHS. Our goal is to strengthen industry connections and better understand
the issues at play in the UK market.
10
$1.69b
By 2030
10,000
Currently
19,000
Prescriptions issued
January to March 2022

11
Despite both industries being considered relatively new, medicinal
cannabis is progressing in Australia and Aotearoa New Zealand.
Though the conversation around decriminalisation and legalisation
continues in both countries, there is minimal prospect of recreational
legalisation any time soon. A tightly regulated medical systemensures
both markets have ample room to grow should regulations continue to
support patient access and sustainable industry growth.
Oceania

Australia
The cultivation, production and distribution of medicinal cannabis was
legalised in Australia in 2016.
The current Australian market is estimated to be worth approximately
NZ$106m
4
with around 120,000 patients
5
accessing a wide range of
products for the treatment of indications such as chronic pain, anxiety,
insomnia, cancer pain, epilepsy and neuropathic pain.
The market is expected to be worth just over NZ$860mby 2030
(expanding at a CAGR of 30.1%)
4
, at which point DeloitteAccess
Economics estimates 670,000 patients may seek to access medicinal
cannabis in Australia
6
.
This growth is driven by the kinds of factors you’d expect in a steadily
maturing industry; increasing affordability, enhanced product options
and improving prescriber education.
Our partnership with Australian cultivator, Cann Group, places Rua in
an ideal position to explore more fully what appears to be an exciting
market right on our doorstep.
12
$106m
Currently
120,000
Currently
$860m
By 2030

Aotearoa
New Zealand’s regulatory framework, the Medicinal Cannabis Scheme,
took effect on 1 April 2020 enabling the research, manufacture and
supply of medicinal cannabis products in New Zealand.
Data released by ManatūHauora, the Ministry of Health, shows that the
number of packs of medicinal cannabis prescribed and supplied in New
Zealand is growing at an average rate of 228% annually. The number of
packs supplied in New Zealand in the year to September 2022 was just
over 50,000 compared to 36,000 in 2021.
New Zealand prescribers are increasingly engaged and curious as they
better understand the role cannabinoids can play in conventional
medicine. While not always considered a first-line treatment,
practitioners are increasingly willing to trial medicinal cannabis where
patients are not responding to, or are intolerant of, standard
treatments.
13
$12.5m
Currently
6,000
Approximately

Aotearoa
14
Process StepProvisional Timeline
Industry Feedback
December 2022
Cabinet policy paper and post-
consultation analysis
March 2023
Cabinet (SWC Committee)
April / May 2023
Drafting of Regulations
May –June 2023
Cabinet (LEG Committee)
November 2023
Implementation
December 2023
In December, ManatūHauora began an industry-wide review of its
regulatory settings.
In our view, the medicinal cannabis scheme provides a robust
framework for prescribers and patients. What has become clear is that
there is some work to do to create an equally robust commercial
framework.
As Rua understands it, the Ministry is now reviewing key areas of
commercial impact, including (but not limited to):
•Export settings
•Non-therapeutic research
•Minimum quality standard testing
•Microbial limits for products intended for inhalation
The Ministry has given industry the following workplan. We’re
encouraged to see real commitment to work at pace to ensure
commercial concerns are addressed.

15
Rua’s
Competitive
Advantage
•A local focus on R&D
•A global-scale supply agreement with one of
Australasia’s largest manufacturers
•World-class regulatory expertise
•Established sales and marketing partnerships
across Europe

16
Approved in January 2022, the acquisition of Zalm provided Rua with a
long-term, end-to-end, supply contract for substantial volumes of GMP-
grade medicinal cannabis at competitive prices through Cann Group.
Cann’s new cultivation and processing facility at Mildura is considered
one of the largest and most advanced in Australasia -capable of
producing 12,500 kilograms of dried cannabis flower per year. Once
fully commissioned, that capacity will increase to up to 70,000kgper
annum. Access to that kind of capacity allows us to build a meaningful
market presence faster and with a greater economy of scale.
Rua is exporting from Australia to Germany as we look to launch our
first European product through Nimbus Health.
Global Production
Capacity
Inside Cann’s Mildura Faciltiy. Photo Credit: Cann Group Ltd.

17
Rua recently signed a five-year master supply agreement with
European medicinal cannabis distributor, Motagon. As well as being
Motagon’spreferred Australia/NZ supplier of medicinal cannabis
products, this agreement ensuresRua’s access to high-value markets
across Eastern and Central Europe. That access is backed by Motagon’s
extensive distribution channels and boots-on-the-ground marketing
support.
Motagonis a subsidiary of Heaton, a Czech pharmaceutical company
with 20 years’ experience in the pharmaceutical industry. Motagonis
focused on introducing a broad range of cannabis-based medicines to
the European Union. The company is active in 20 countries across
Central and Eastern Europe in countries including Poland, the Czech
Republic, Malta and Croatia.
International Sales
and Marketing
Prague Castle and Mala Stranaor Little Quarter during twilight blue hour, Prague, Czechia.

18
Working at scale with an Australian cultivation partner enables Rua to
build sustainability on multiple horizons.
While our Australian partner takes care of cultivation at scale, our
world-class cultivation team in Ruatorea is working on the next
generation of Rua genetics. Our ultimate goal is to develop incredible
strains here in Te Tairāwhiti, and grow them at scale for distribution to
patients internationally.
This is consistent with Rua’s original capital-light business model,
enabling Rua to develop valuable Intellectual Property and supply
global patients with unique, Rua-developed medicinal cannabis
products in a range of platforms.
From Te Tairāwhiti
to the World

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Disclaimer
This publication and the information contained in or accompanying this publication are not, and are under
no circumstances to be construed as, an invitation to subscribe for, or an offer of, shares, securities or
financial products to any person, in any country or the basis for a contract, financial advice, other advice or
recommendation to conclude any transaction for the purchase or sale of any security, loan or other
instrument. This publication has not been independently verified.Neither Rua nor any of its directors,
officers, shareholders, advisors, agents or employees make any representation or warranty as to the
accuracy or completeness of the information contained in this presentation and those parties shall have no
liability for any statement, opinion, information or matters arising out of, contained in, or for any omissions
from, or failure to correct or update any information in, this presentation or any other communications
transmitted to you in relation to this presentation.
Some statements in this release contain forward-looking information.Forward-looking statements are
subject to several risks and uncertainties, many of which are beyond the Company's ability to control or
predict, that may cause the actual results of the Company to differ materially from those discussed in the
forward-looking statements.

References
1.https://www.expertmarketresearch.com/reports/medical-cannabis-market. Retrieved 25 January 2023.
2.The European Cannabis Report: 7th edition: Reports. Prohibition Partners. (2022, April 8). Retrieved 25
May 2022.
3.The German Cannabis Report. Prohibition Partners (October 2019).
4.https://www.researchandmarkets.com/reports/5450192/Australia-legal-cannabis-market-size-share-and
5.https://www.grandviewresearch.com/industry-analysis/australia-legal-cannabis-market.
6.MTPCAustralian Medicinal Cannabis Industry Report. October 2021. chrome-
extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.mtpconnect.org.au/images/MTPC_Australi
an%20Medicinal%20Cannabis%20Industry.pdf. Retrieved 11 January 2023.