Medical cannabis company Cann Group says it will build its planned huge marijuana greenhouse in regional Victoria, rather than near Melbourne’s Tullamarine Airport.
Cann Group said on Tuesday it has entered into a non-binding agreement to buy a site in Mildura for $10.75 million and plans to build a 3.4-hectare state-of-the-art greenhouse there.
Once finished it will be the largest purpose-build medical cannabis production facility in Australia, capable to producing up to 50 tonnes of dry flower a year, the company said.
Cann Group chief executive Peter Crock said specialised components and materials were in transit to Australia and site work would begin immediately.
The company has a five-year agreement with Canada’s Aurora Cannabis, which holds a 22.9 interest in Cann Group, for the offtake of medical cannabis produced there in excess of what’s needed for Australian medical marijuana patients.
Cann Group had previously announced plans to build the greenhouse at a site leased from Australian Pacific Airports, but backed away after receiving estimates on how long approvals and build time would take.
The site may still be used, Cann Group said.
The Mildura greenhouse is expected to cost $130 million, funded through debt and equity, and should be finished by the third quarter of next year, Cann Group said.
Based on current cannabis prices, the greenhouse is expected to generate revenue of $160 million to $200 million, the company said.
At 1307 AEDT, Cann Group shares were up 14.07 per cent to $1.905, a one-month high.