Medicinal cannabis developer THC Global (ASX: THC) is cutting the red ribbon on its new production facility in Southport, Queensland with multiple public figureheads attending a high-profile event that took place yesterday.
Australia’s Federal Minister for Health, Hon Greg Hunt MP, officially opened the largest bio-pharma extraction facility in the southern hemisphere, able to produce in excess of 12 tonnes of raw good manufacturing practice (GMP) certified active pharmaceutical ingredient (API), which equates to approximately 120t of high-grade cannabis oils annually.
The event was attended by Federal Member for Moncrieff Ms Angie Bell MP and Mr Rob Molhoek MP, the Queensland State Member for Southport.
Commercial production is expected in early 2020, and will offer Australian patients medicines at lower prices than existing imports and generate surplus produce to enable significant global export opportunities in a supply restricted global market.
“This production volume far outstrips current Australian demand considering the Australian Government’s projection of 100,000 prescriptions annually in the near term, enabling THC Global to both support Australian patients with Australian product and still be a major participant in the global medicinal cannabis market,” the company announced.
From a microeconomic perspective, the facility will establish THC Global as Australia’s first commercial-scale supplier of Australian-produced medicinal cannabis, but also, from a macroeconomic perspective, will propel Australia forward as a major global participant in the medicinal cannabis industry.
THC Global said that as Australian medicinal cannabis products from the Southport facility become available for sale next year, the company expects to be exporting product in commercial volumes to New Zealand, Canada, Europe and Asia.
Despite being granted a manufacturing licence just last month, THC Global has been putting together a concerted “farm-to-pharma” strategy that includes product off-take agreements “expected to be completed in the coming months” as product validation, Therapeutic Goods Administration (TGA) inspections, and Office of Drug Control (ODC) permitting is received for the Southport facility.
More broadly, THC Global intends to set up industrial-scale production including a full range of required functions such as research, development, cannabis cultivation and pharma-grade manufacturing, all conducted within Australia.
Growing market footprint
In addition to its Southport facility in Queensland, THC Global has a growing arsenal of facilities and commercial entities that will supply the global cannabis industry with a “next generation of medicinal cannabis”.
THC Global has secured close to 150,000 square metres of land for a proposed high-volume cannabis cultivation facility in Ballina, New South Wales. The land is USDA Certified Organic, enabling the company to explore the ability to cultivate organic medicinal cannabis.
Furthermore, THC Global owns a place in Bundaberg, Queensland which it says constitutes its primary cannabis strain R&D, tissue culturing, and cultivation facility which it expects to expand in order to increase cultivation capacity and develop research scale manufacturing.
THC Global is currently cultivating medicinal cannabis at this facility, having received licences and permits form the ODC earlier this year.
At the Bundaberg facility, THC Global has developed Cannabis Sativa strains from original industrial hemp plants that are tailored to the Australian climate and can be grown in low-cost outdoor and greenhouse facilities while maintaining a high consistency of cannabinoid content.
As a clear indication of the company’s future intentions, and a sure sign that the Australian cannabis industry is blooming, THC Global said it expects to undertake “further investment” in order to expand this facility in the near term to include a significantly increased cannabis cultivation capacity for both on-site activities and transport to Southport for further processing.
As well as production from Southport, Ballina and Bundaberg, THC Global also owns a number of operating subsidiaries with specific focus areas and strategic directions – with the overarching business being a diversified, vertically integrated, cannabis company.
A wholly owned subsidiary called THC Pharma is managing THC Global’s Southport manufacturing operations while Canndeo is a medicinal cannabis business with proprietary access to the largest Plant Breeders’ Rights registered strain portfolio of cannabis Sativa, and operates the Bundaberg facility.
Strains are high in cannabidiol – the active ingredient for medicinal cannabis – that have been developed for high yield low-cost greenhouse production techniques in the Australian climate.
In Canada, THC Global operates the Vertical Canna brand – a vertically integrated cannabis business that’s being actively put together via strategic acquisitions with “near-term revenue and profit generation expectations”, according to THC Global.
The company is expected to receive its cultivator licence in the foreseeable future and has already secured 11 acres in Nova Scotia designated for new cannabis development.
THC Global also owns Crystal Mountain, a hydroponics equipment wholesaler, retailer and manufacturer, carrying over 600 different products.
Recent legislative changes in Canada have empowered small scale cannabis cultivation which has encouraged a widespread attraction towards this previously restricted activity.
Crystal Mountain additionally holds a portfolio of nine registered trademarks for hydroponics equipment.
According to THC Global, distribution agreements into Europe have been signed, with further partnerships in negotiation.
“We believe Australia will be a future leader in the area of medicinal cannabis, through projects such as THC Global’s which bring world-class scalable production assets and research facilities producing Australian made medicinal cannabis for Australian patients and the global export market,” the company said.