An Israeli medicinal cannabis start-up is one of the latest firms to list on the Australian stock exchange, as the ASX seeks to diversify its traditionally resource-dominant stock offering.

Despite its Israeli roots, eSense-Lab chose the Australian Securities Exchange (ASX) to make its foray into global markets to take advantage of investor appetite here for new technology stocks.

A brainchild of Israeli doctor Yaron Penn, who has spent the past six years refining the technology, the firm produces a product which smells and tastes like cannabis and has many of its medicinal benefits but does not contain a trace of an actual cannabis plant.

It is also produced without cannabinoids, the element of cannabis which is illegal in many countries because it evokes a psychoactive response from users.

PHOTO: eSense-Lab chairman Brendan de Kauwe says his company is the first to list on the ASX.  (ABC News: Kathryn Diss)

eSense-Lab chairman Brendan de Kauew said international start-ups were attracted to the ASX because they often flounder launching on larger indices.

"With the OTC ... the junior index in North America ... they don't have the same liquidity, the same appetite to raise capital at attractive prices in that index, so the ASX has in the last couple of years become very, very attractive not just for Israeli companies but for many companies worldwide," he said.

"They have been very active trying to bring Israeli companies over here and this is the first actual Israeli company which has been listed on the ASX."

Innovative states targeted

PHOTO: eSense Lab creates medicinal cannabis by using organic compounds called terpenes. (Supplied: eSense Lab)

Attracting companies like eSense-Lab to list in Australia is part of a broader ASX push to diversity its stock offering, 40 per cent of which are resource companies.

ASX general manager of listings Max Cunningham said the market was focused on attracting business start-ups from four key countries.

"This is basically four key countries — New Zealand, Israel, Singapore and Ireland, and these are basically countries which are first world, they've got free media, democracy, rule of law," he said.

"They are well regarded as innovative states, they generally develop businesses that are globally focused because their economies are relatively small and they're innovative, so they are seen as punching above their weight.

"And all those countries have constrained public capital markets."

Mr Cunningham said failure was more likely on some of the larger capital markets, like the NAZDAQ.

"Your ability to attract a broad pool of investors is limited," he said.

"What we provide here is a $1.4 trillion capital market in the form of publicly traded equities and more importantly, one of the fastest growing savings pools in the world.

"You can list here and be a little bit smaller and get a little bit broader investor attention ... if you are basically listing on NAZDAQ with a company below a billion dollars, you're what they consider a very, very small company."

Cannabis start-up enters market on a high

eSence-Lab's share price hit a high of $0.55 in late March, more than double its initial February listing price.

The company has already signed a $500,000 contract with a US-based vaporizer company who wants their product.

eSense-Lab said it would initially focus on getting its product into North America and Europe where the demand is strongest.

The product is expected to feed into a rapidly growing global E-liquid market, which was poised to hit almost $33 billion by 2021 and expected to grow to more than $50 billion by 2025.

Earlier this year, the Australian Federal Government relaxed importation rules of medicinal cannabis until there was an Australian industry up to meeting demand.