THC’s got a new pot plot – but it’s still waiting on a growing licence
The Hydroponics Company has secured a second plot of land to develop cannabis growing facilities.
The medical cannabis developer (ASX:THC) has entered into an agreement with fellow pot stock Eve Investments (ASX:EVE) to lease organic-certified land in northern NSW – where it hopes to grow the green stuff.
THC was quick to point out it had yet to pass all regulatory and licence approvals. But if successful it would build infrastructure to plant cannabis crops and develop processing facilities.
As part of the deal, THC would provide access to its medicinal cannabis for use in EVE’s Meluka Honey production. In return THC would use EVE’s tea tree extract to develop its new products.
The new spurred EVE shares up 27 per cent in morning trade on Friday – at 1.4c.
THC last week bought a separate $2.55 million Queensland medical cannabis manufacturing plant.
“The execution of the Term Sheet by THC has the potential to give THC another low-cost growing facility offering high quality organic medicinal cannabis crops as well as potential synergies with the Meluka Health team to deliver new products to the market made with THC’s cannabis,” chair Steven Xu told the market.
“With the acquisition of THC’s biomanufacturing facility last week, THC is now in a prime position for expansion of its research program and to enter into production.”
The news was released after market close on Thursday. THC shares fell slightly to 67c on Thursday, giving the stock a market cap of about $60 million.
THC banked about $1.1 million in customer receipts last quarter but burned through $1.6 million, leaving $13.2 million in the kitty.
Licence yet to come
THC does not yet have a manufacturing licence from the government so it can’t yet use the new plant for medical cannabis production.
The company applied for a licence in the fourth quarter of calendar 2017 via subsidiary CannDeo.
A spokesman told Stockhead THC expected to receive a licence in the “coming months” although the exact date was up to the federal government’s Office of Drug Control which hands them out.
CannDeo was awarded licences for research and cultivation in July and October last year, but doesn’t have the all-important permit that gives the go ahead to actually start growing marijuana.