Australian-based medicinal cannabis developer THC Global (ASX: THC) is set to become a licenced cultivator following the acquisition of a 16,000 square metre site in Canada for the development of a cannabis production facility.
The company today announced its wholly-owned subsidiary Vertical Canna had completed the purchase of private entity 10034622 Canada Inc which holds the property in Nova Scotia and is in the process of becoming a licenced cultivator.
The proposed facility will have a first stage build footprint of just 1,850sq m, allowing for significant scalability of operations over time across the entire landholding.
THC aims to produce high-quality cannabis flowers from the facility for sale into the Canadian recreational and medicinal markets, with plans for future higher value-add production capabilities to be established at the site.
The company said that while the present yield estimate for first stage development is around 37,000 kilograms of dried flower annually, it is in negotiations with agricultural technology partners to develop a higher yield-per-square-foot which will significantly increase this figure.
Negotiations for offtake agreements are also underway for initial dried flower production and the value-add manufacturing of cannabis into other products.
THC operates under a ‘farm to pharma’ business model and is currently delivering high quality medicinal cannabis products to Australian patients through existing access schemes.
Chief executive officer Ken Charteris said the Canadian acquisition is a key part of the company’s move to extend its reach internationally.
“Entering the Canadian cannabis market as a local producer is a significant step in our global strategy,” he said.
“The first stage of the project is targeted to deliver near-term profitability [and] the second will add significant value to our company and allow us to take advantage of lucrative business opportunities within the same region.”
Mr Charteris said THC would consider debt and hybrid facilities within Vertical Canna which will allow it to complete the project’s development and achieve revenue-generating production with limited upfront capital outlay.
The company will also pursue an application to become a licenced processor and seller of cannabis products from its Canadian facility.
At midday, shares in THC were up 3.67% to $0.565.