The Hydroponics Company expects to be making cannabis oils by early 2019
The Hydroponics Company believes it can take its new growing site from nothing to cannabis plants-in-ground in less than 12 months.
New CEO Ken Charteris told Stockhead he expect to be growing plants at his original Bundaberg greenhouse within six months and producing cannabis oils by the end of March next year.
“Our timelines are far more advanced than anyone else at the moment,” he said.
The Hydroponics Company (ASX:THC) is still waiting on licences and permits from the federal government’s Office of Drug Control.
The Office issues licences that allow cannabis growing for commercial purposes, research or manufacture. But growers also need a separate permit which involves a facility inspection and specifies things like which strains a licence holder can grow and the number and weight of plants.
>> Scroll down to see which ASX medical cannabis stocks have licences
THC needs a medical cannabis manufacturing licence for the Southport manufacturing facility. The application was lodged in the fourth quarter of 2017.
It needs a cultivation licence for the Jenbrook site in NSW, the application for which is in the process of being put together.
And it needs an all-important permit for the Bundaberg site, though it’s already got a licence for that facility, received in October last year.
A cultivation licence allows a company to move forward with plans to build grow-houses, but a permit is what allows them to actually start growing commercially.
Mr Charteris believes they will have a permit by the end of the year.
The Jenbrook site will need to be licensed, built and permitted within 12 months to meet Mr Charteris’ timetable.
But the Office of Drug Control has been overwhelmed by applications and Mr Charteris says the average turnaround time for a licence — let alone a permit — is 12 months.
He believes it’s not unreasonable to think THC can take the NSW Jenbrook site, which they’ll lease from Eve Investments, from tea tree to medical cannabis in 12 months because they have an upstream buyer (or “off-taker”) in place.
The company bought the Southport, Brisbane pharma manufacturing plant from Leo Pharma in April for $2.55 million.
Companies must have an off-taker in place in order to get a permit because there must be a clear line of sight over where the cannabis plant will end up.
Mr Charteris says many ODC licensing applications are delayed because the off-taker is not ready yet.
He says having a facility that is technically ready to start producing drugs today, even if it’s not yet licensed to do so, should hasten the licensing process for Jenbrook and the permitting process for Bundaberg.
If everything goes to Mr Charteris’ plan, most of the Southport production will be exported. They will apply for an export licence in the coming months.
As of Wednesday the ODC had granted 18 cultivation licences, 20 research licences, and 13 manufacturing licences.
The ODC does not reveal which companies have permits, but only a handful have been issued.
So far Cann Group (ASX:CAN), the Victorian state government, Little Green Pharma in Western Australia and Medifarm in Queensland are some of the only businesses to gain a permit since medical cannabis was legalised in early 2016.
Here’s a list of ASX medical cannabis stocks that have licences:
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