In April last year THC bought a pharmaceuticals making plant for a steal at $2.55m, from a company whose big Brisbane plans collapsed when its drug failed a final clinical trial.
On Thursday, the company (ASX:THC) hosted a tour for money manager types, and Stockhead, to show off what it reckons is a one-of-a-kind among pot companies in Australia.
That is, a GMP-certified, ready-to-go pharmaceuticals manufacturing plant for marijuana.
This means it can deliver cannabis products ranging from a basic extract of the full plant to high purity APIs – active pharmaceutical ingredients — that have been scrubbed of nasties and undesirable components.
Lost in a pot plant maze
Inside the facility is a rabbit warren of air-locked rooms, comprising a quality assurance lab upstairs, an extraction room with four tanks that can each work through 500kg of dried bud, and a variety of purification and processing rooms.
It is smaller than we expected but Mr Charteris and medical cannabis lead Dr Andrew Beehag assured that it is a full-scale site.
Mr Charteris said a NASDAQ-listed company – he didn’t name drop which – is currently looking at building the same model and scale in Europe, a project which he says will take up to five years to finish.
The replacement value of the building and the equipment is about $35 million.
They also secured the site next door which isn’t separated by a barbed-wire topped fence like the other boundaries to protect against “bad neighbours”, according to Mr Charteris.
This is how you make a cannabis API
The way extraction will work is by leaching cannabinoids and terpenes – the fragrant oils – out of dried bud that’s been fed into an extraction tank.
That is funnelled into another tank for filtering and so on until tonnes of material is whittled down to hundreds of grams of extract.
This is sent through the other rooms in the facility where it’s purified into different qualities of extract or active ingredients are stripped out.
The plant also features a synthesis facility, a left-over from LEO Pharma before that clinical trial wrecked their best-laid plans.
Dr Beehag says they are definitely not looking at making synthetic cannabis, which he says is illegal in Australia, but they are factoring the wall-sized machine into future decisions about ways to value-add.
They are talking to a company about testing it with drug delivery mechanisms.
The plant will be able to deliver 12,000kg of cannabinoids a year, which THC says is about the equivalent of 120,000kg of cannabis oil.
Still waiting on that permit
The Southport, Brisbane facility doesn’t yet have Office of Drug Control permission to start processing marijuana.
CEO Ken Charteris hopes the requisite permit will arrive this year but wasn’t clear on when the facility will start producing extracts. He says the THC Bundaberg crops aren’t expected to produce a commercial harvest until 2020.
Mr Charteris says they’ve been approached by some “major” foreign companies for offtake agreements, but they haven’t signed anything yet.
Stockhead travelled to Southport, Queensland, courtesy of THC Global.
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