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Medicinal cannabis player THC Global (ASX:THC) is finally on the path to production in Queensland.
The company announced this morning it has secured a manufacturing licence from the Australian Office of Drug Control (ODC) for its facility in Southport.
It’s been a lengthy approval process for THC, which first lodged its application for the site in the fourth quarter of 2017.
Shares in the company rose by as much as 15 per cent in morning trade. A short time ago, they were up 11 per cent.
The ODC doesn’t say how many manufacturing licences it has issued, but there are a handful of other producers that have received them in the Australian market.
However, THC Global CEO Ken Charteris says the company’s licence is the “most significant” approval in the local market to-date.
“I don’t think the market has fully understood the links our site has with scalability,” he told Stockhead.
“The scale of this facility is much bigger than anything else in the market; it’s not just a plant, it’s a full-scale bio-extraction facility that’s ready to go online.”
The company expects annual production from Southport will amount to over 12,000kg of Active Pharmaceutical Ingredient (API) medicinal-cannabis isolate products.
The APIs are compliant with the Good Manufacturing Standards (GMP) set out by the Therapeutic Goods Administration.
Charteris told Stockhead that medicinal cannabis differs from direct strains of marijuana because it’s “not a commodity product”.
“There’s a global shortage of supply, so acquisition of customers isn’t going to be an issue,” he said.
THC said it expects to be supplying Australian patients with medicinal cannabis by early 2020. It also hopes to serve “expanding global demand for pharmaceutical-grade GMO API isolates and formulated medicines.
The Southport facility will provide a platform for engagement with industry researchers, who will use it to conduct clinical and study trials.
Charteris said with the scale of its production facility, THC was aiming to be “one of the lowest cost producers globally in comparison to manufacturers in Israel and Canada”.
The next step for the company is to complete “product validation activities” at Southport, which it expects will be completed in Q4 this year.