The Hydroponics Company says it will finalise NSW cannabis deal this month
The Hydroponics Company has struck a delay in tying up a site in New South Wales to grow medicinal cannabis, but says it’s well on its way to establishing supply chains for its marijuana products.
In May, the company (ASX:THC) entered a deal with tea tree oil company Jenbrook and nutrition business Meluka Health.
Eve Investments (ASX:EVE) owns half of Jenbrook and is finalising 100 per cent ownership of Meluka.
THC company says the parties need 21 more days to finalise terms for the three parts of the agreement.
The deal includes a lease agreement for THC to use a site on Jenbrook’s farmland for growing medical cannabis.
It also involves a supply agreement where THC would provide medicinal cannabis to Meluka Health for use in the company’s honey products, as well as an agreement for THC to access Meluka’s tea tree extract for use in medicinal cannabis products.
The deal is now expected to be finalised by July 23.
However, the growing of medicinal cannabis on the Jenbrook-leased site is still subject to “statutory and regulatory approvals”.
In May, the company confirmed it had applied to the Office of Drug Control to gain the relevant licences to grow organic medicinal cannabis on the site.
There are three levels of cannabis licences currently operating in Australia.
Cannabis research licences allow businesses to produce the plants for research into their medicinal uses, while medicinal cannabis licences allow production of cannabis for medical uses. Manufacturing licences allows for the manufacture of cannabis or cannabis extracts for medicinal cannabis products.
The Hydroponics Company has a research and cultivation licence but its manufacturing licence is still under application.
When contacted by Stockhead, a company spokesperson said licence applications were “filed some months ago” and it was not clear when the business would secure the manufacturing licence grade.
“It’s hard to say, but these things can move pretty quickly,” the spokesperson said.
THC shares put on 4 per cent to 52c in early Tuesday trade. The stock is up 85 per cent over the past year.