Just as the cannabis patient access sector in Australia is beginning to ramp up, one of the first companies in has decided to pull out.

The Hydroponics Company (ASX:THC) has killed its agreement with Canadian medical cannabis chain National Access Cannabis to bring Canada-style clinics to Australia.

The pair signed an agreement in December last year.

A National Access manager visited Australia recently and decided the Canadian system couldn’t work here under current regulations.

“THC will continue to investigate ‘outside-the-box’ doctor and patient engagement opportunities,” chairman Steven Xu said.

“THC continues to develop its supply and distribution procedures including through its partnership with Synapse on the Medicinal Cannabis Medicines Portal and other avenues,” Mr Xu said.

The numbers of patients who can access medical cannabis in Australia still numbers fewer than 1000, two years after the drug was legalised for medicinal use.

Greater patient access through clinics and more streamlined rules has been a key forecast for the sector in 2018.

THC shares dipped 1.5 per cent to 67.5c on the news.