Medicinal cannabis player THC Global (ASX: THC) is on its way to Asia.
The company has secured a mutually exclusive partnership with Heleogenics Sdn Bhd, a Malaysian agri-tech company.
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Its first order of business? Working with the Malaysian government and try to establish a framework for the legalisation of medicinal cannabis.
From there, CEO Ken Charteris wants to keep building Asian networks, and potentially leverage THC’s expertise into other Asian markets.
Shares in THC were unchanged at 55 cents in early trade, well above its IPO price of 20 cents but down from an all-time high of one dollar.
Getting on the front foot
The deal with Heleogenics is part of THC’s strategy to be well-placed as a medicinal cannabis supplier in the Asia-Pacific region.
But as with many aspects of the nascent market for medicinal pot, there’s a fair bit of due process involved before lawmakers come to the party.
In that environment, signing agreements with regional players helps speed up that process — and it’s also cheaper than going it alone.
“The partnership with Heleogenics is initially to liaise with the Malaysian Government towards the legalisation of medicinal cannabis in Malaysia, including the development of policy frameworks and legislation,” THC said.
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Regarding the commercial terms of the deal, a spokesperson for THC told Stockhead that the agreement may lead to a joint-venture structure down the track, but for now the focus is on lobbying and educating the Malaysian government.
No specific timeframe was provided for legislative developments in the Malaysian jurisdiction, although Heleogenics director Dr Arif Anwar said the two companies hoped to deliver medicinal cannabis to the Asian region “in the near term”. And Charteris says that if legislative clearance does occur, the company wants to be ready.
Back on Australian soil, THC has been busy ticking boxes to obtain the myriad number of regulatory approvals in order to become a full-fledged medicinal cannabis producer. Growing and crop cultivation have commenced, and the company is now awaiting licensing for its bio-pharmaceutical extraction facility in Southport, Queensland.
The current timeline is for the company to start producing small batches of THC oil later this year.
In other ASX food & agriculture news:
Organic oyster farmer Angel Seafood (ASX: AS1) is on the acquisition trail, announcing an agreement to purchase an additional 0.5 ha of water in the Beacon Zone at Coffin Bay for $125,000. AS2 will pay a 20 per cent deposit with the balance to be paid by 31 January 2020. It also forecasts around $100,000 of infrastructure costs.
“While this is a relatively small parcel of water, its location and characteristics make it a highly attractive acquisition for our business,” CEO Zac Halman said.
Shares in AS1 were unchanged at 17.5 cents, down from their initial listing price of 20 cents.