One of Australia’s leading cannabis developers, Cann Group (ASX: CAN) has been approved to manufacture cannabis products at its existing northern and southern medicinal cannabis facilities in Melbourne.
The licences relate to the manufacturing, packaging, storage, transport and disposal of medicinal cannabis in final dose and intermediate forms. However, the company must still obtain appropriate permits in relation to the undertaking of specific activities under the licences.
As it stands, Cann Group holds all required cultivation, production and manufacture licences under the Narcotics Drugs Act, along with import and export permits under the Australian Customs Act.
Under a newly signed agreement signed in March this year, Cann Group plans to construct a state-of-the-art large-scale greenhouse in north-west Victoria’s Mildura region to produce medicinal cannabis for domestic and international markets.
The company has signed a non-binding heads of agreement to purchase the site for $10.8 million and expects to produce about 50,000 kilograms of dry cannabis flower per annum from the new facility when it’s fully operational.
Cann Group said it estimates the facility will cost around $130 million to construct, which it will fund through a mix of debt and equity.
Onwards and upwards
“Securing our ODC manufacturing licences is an important milestone that supports our fully integrated business model strategy,” said Peter Crock, chief executive officer of Cann Group.
“The ability to undertake these activities at both our northern and southern facilities gives us considerable flexibility as we continue to progress the development of our new state-of-the-art cultivation facility near Mildura,” Mr Crock added.
In addition, Cann Group has confirmed that its newly received approvals will complement the manufacturing arrangements in place with IDT Australia, another company which was granted its ODC manufacturing licence in May this year.
The working relationship with IDT is expected to provide Cann Group with “immediate access to proven expertise”, and could boost the company’s overall performance both in terms of yield and harvest quality.
Given the company’s early-mover status and circa $300 million market cap, Cann Group is seeking to take its operations into the next level by expanding production and boosting sales.
The medicinal cannabis developer was the first company in Australia to secure its necessary permits to cultivate and research cannabis for human medicinal purposes.
As a result, Cann Group has become Australia’s first company to harvest a medicinal cannabis crop. It has now successfully completed 24 harvests to date.
The news pushed Cann Group shares up to $2.13, up almost 6% in morning trade.