THC Global: a cannabis market leader in the Asia-Pacific region

THC Global: a cannabis market leader in the Asia-Pacific region

THC Global is unique thanks to its world-class cannabis production facilities.

THC Global Group Limited is a vertically integrated farm to pharma diversified cannabis company with primary operations in Australia, as well as activities in New Zealand and Canada.

THC Global’s cannabis operations follow an integrated approach across research and development, cannabis cultivation, processing, and pharmaceutical grade GMP manufacturing.

THC Global is unique amongst other cannabis companies worldwide in having secured world class cannabis production facilities with minimal capital expenditure compared to other global major producers.

THC Global’s key asset is a pharmaceutical bio-floral extraction facility in Queensland, Australia. Built to European standards by the former owners LEO Pharma, THC Global purchased the Extraction Facility in early 2018 and has since completed the rigorous licensing requirements in Australia for bringing the extraction facility online for medicinal cannabis processing.

THC Global expects to now complete product validation in late 2019, as well as secure GMP certification. Scaled up production of medicinal cannabis for supply to Australian patients and the global export market is targeted to commence in early 2020. Further, THC Global’s extraction facility will be pharmaceutical Good Manufacturing Practice (GMP) certified for medicines within the coming weeks.

THC Global’s Extraction Facility at initial capacity will produce in excess of 12,000kg of GMP Active Pharmaceutical Ingredient (API) isolates, as well as equivalent quantities of full spectrum, and broad-spectrum extracts. THC Global will be able to further process these bulk APIs and extracts into finished products including oils, capsules powders, sublinguals, tablets, creams, and other products as market demand dictates.

In addition to the extraction facility, THC Global has secured a number of production facilities in Australia in order to enable scalability of the company’s operations. These include a strain R&D and tissue culturing facility, a 66,000m2 ready to produce hydroponic greenhouse site, 180,000m2 of open field cultivation area, and an additional 150,000m2 of USDA certified organic cultivation area. Combined, these production assets enable THC Global to be a major producer of pharma grade GMP certified medicinal cannabis from Australia.

Low cost pharma GMP certified producer

THC Global has access to the largest collection of plant breeder right (PBR) protected cannabis sativa strains in Australia. The company has focused on the genetic development of a select few of these strains, which have been developed to thrive within hydroponics greenhouses located in sub-tropical regions such as eastern Australia.

Access to proprietary cannabis sativa strains with documented lineage and traceability places THC Global in a unique position globally, particularly as the Asian region appears to be staying away from cannabis indica or hybrid strains with limited traceability. Further, THC Global’s cultivation facilities and processes are Good Agricultural Practices (GAP) compliant.

Through development of its own unique strains, ability to cultivate in hydroponic greenhouses or open field, and operating world class pharmaceutical grade facilities, THC Global is able to be a low-cost producer whilst meeting or exceeding the highest of quality standards and expectations.

This low-cost production enables THC Global to compete globally with Aurora, Tilray, Canopy Growth, and other current global major producers on price – without sacrificing scalability, compliance, quality, or safety. THC Global has been able to reach this competitive stage without a multi-million-dollar capital expenditure program as the majors have done.

THC Global will be delivering a new range of pharmaceutical grade medicinal cannabis products from Australia at highly competitive prices globally from early 2020.

Australian medicinal cannabis supply

Presently in Australia, for a patient to seek medicinal cannabis, they are required to apply through their doctor under the Special Access Schemes or the Authorised Prescriber Scheme. The Australian government has disclosed that over 8,500 patients have been authorised to access medicinal cannabis in Australia under these current schemes, however, expects that number to increase to up to 100,000 patients within the next two years.

Almost all of these patients in Australia using medicinal cannabis are being supplied imported products from North America or Europe, with domestic Australian producers either being at research scale or yet to commence multi-million-dollar capital expenditure programs completing in the coming years. With THC Global coming into commercial production in early 2020, THC Global expects to be the first Australian company to be delivering Australian medicinal cannabis to Australian patients at commercial scale.

Patients in Australia are being charged thousands of dollars in order to access these products. THC Global will be entering the Australian market with a retail price of expected to be at least half the price of the current cost of imported products, whilst still being highly profitable.

THC Global has been a strong supporter of increasing access to medicinal cannabis in Australia. In addition to welcoming further legislative change in Australia, THC Global hopes to achieve broader accessibility through increasing supply and reducing cost to patients.

Export opportunities

Being a low cost pharma grade GMP producer meeting or exceeding global quality and safety standards makes THC Global’s products highly attractive in the global cannabis marketplace. The capacity of THC Global’s extraction facility and its other Australian production assets enables the company to support the entire projected Australian patient demand as well as have sufficient capacity to be a competitive major global exporter. THC Global expects to commence commercial export sales into Europe, North America, and the Asia Pacific in early 2020.

Product formulation and development

THC Global expects its first two commercial products to be two formulated CBD medicines produced in Australia using THC Global’s own broad-spectrum CBD extracts. Following this launch in early 2020, the company expects to launch additional products to complete the product range, including additional CBD formulations, THC and CBD blended formulations and other full spectrum and broad-spectrum offerings.

In the bulk API market, THC Global will be able to offer full spectrum and broad-spectrum extracts, as well as bulk isolates. THC Global’s pharmaceutical grade GMP certified production is expected to be highly attractive in the global market which currently lacks supply of GMP certified API compliant with the European standards.

THC Global will also look to the development and supply of the ‘next-generation of medicinal cannabis’ utilising the technological capabilities of the Southport facility. These products will be based on the pharmaceutical grade GMP API cannabinoid isolates and extracts produced by THC Global.

Focussing on the Asia Pacific region

Australia’s medicinal cannabis regulatory scheme is a ‘pharmaceutical first’ model, expecting all participants to be producing and supplying within regulations and standards equivalent to current narcotics producers. As a regulatory model, Australia’s approach is one that many countries in the Asia Pacific region are looking to adopt or replicate, particularly within societies valuing strong regulations on narcotics that are simultaneously supportive of the pharmaceuticals industry.

As a pioneer in the Australian medicinal cannabis industry – including being the first already constructed commercial scale medicinal cannabis extraction facility to be licensed in Australia – THC Global is in prime position to operate within other Asia Pacific nations as medicinal cannabis becomes legalised in various nations. THC Global is currently in active partnership within Malaysia and expects to enter additional markets soon.

THC Global’s extraction facility

THC Global’s extraction facility was opened by the Australian Federal Minister for Health the Honourable Greg Hunt MP in August 2019, accompanied by other local members of Federal and State Government. This extraction facility is pharmaceutical grade GMP certified and compliant with the current European standards and specifications.

The extraction facility is the first commercial scale medicinal cannabis production facility in Australia and places THC Global in position to lead the Asia Pacific medicinal cannabis industry. The facility is expected to deliver first product in December 2019, in advance of commercial production and supply commencing in early 2020. The extraction facility is the largest of its kind in the Southern hemisphere and is expected to be one of the largest producers of medicinal cannabis extracts in the world as production at the facility scales up into 2020.

Ken Charteris, Chief Executive Officer of THC Global said: “THC Global will be producing medicinal cannabis at the highest quality standards, offering bulk API for the global wholesale market as well as finished formulated medicines for patients as soon as early 2020. This is a first for Australia – commercial scale production of Australian medicinal cannabis for sale to Australian patients. THC Global will be the first Asia-Pacific company ready to compete with the global majors including Aurora, Tilray, and Canopy Growth on price, whilst being scalable and exceeding global quality and safety standards.”

Prescriber, pharmacy and patient engagement

THC Global has been a long-standing advocate for better prescriber, pharmacy, and patient engagement in medicinal cannabis to ensure that individual doctors, individual pharmacies and individual patients who want to access medicinal cannabis to be educated on access pathways. THC Global was a founding partner of the Medicinal Cannabis Medicines Portal (mcmp.com.au) which provides information and support to Australians prescribers, pharmacies, and patients.

Additionally, in New Zealand, THC Global sponsored the development of independent medicinal cannabis information website CBDinfo (CBDinfo.co.nz) which aims to provide information to New Zealand patients and prescribers obtaining high quality information on the use, availability and potential benefits and risks of CBD products.

THC Global is exploring additional opportunities for prescriber, pharmacy, and patient engagement and education activities formed to suit to the regulatory schemes of particular target markets. These activities strengthen the local medicinal cannabis industry as a whole, increase patient accessibility and patient outcomes, as well as furthering brand development and recognition within the medicinal cannabis sector for the Company.

THC Global’s other Australian facilities

In addition to its Extraction Facility, THC Global has a number of medicinal cannabis projects within Australia. The company’s strain R&D and cultivation facility conducts the company’s R&D activities for its proprietary cannabis sativa strains, has tissue culturing capabilities, and is currently cultivating those strains. The company’s activities at this facility have confirmed THC Global is able to operate as a low-cost medicinal cannabis plant material producer. THC Global’s cost per gram of cannabis plant material for extraction is highly competitive compared to some of the recent global cannabis tenders such as those in Italy.

THC Global’s strains are highly consistent in their CBD and THC content as a result of well-developed genetics and cultivation by tissue culturing rather than from seed. The company’s strains do not require expensive cultivation facilities – being able to grow in hydroponic greenhouses rather than high cost climate controlled indoor facilities.

THC Global has also recently secured an already operational ready to go 66,000m2 of hydroponic greenhouses adjacent to 180,000m2 of open agricultural land suitable for open field cannabis or hemp cultivation. This facility is expected to be operating in early 2020 following licensing for cannabis cultivation, and will be a primary supplier of cannabis plant material to THC Global’s extraction facility.

THC Global will further explore the potential to use part of the open field agricultural land on the property for hemp cultivation, as the company considers the nutraceutical, cosmeceutical, and food markets globally to be an additional potential revenue stream for the company.

As an already licensed and permitted medicinal cannabis producer in Australia, THC Global is in a unique position to enter this hemp-based market. The current hemp regulations do not allow for a hemp producer to conduct extraction from hemp plant material without holding a medicinal cannabis licence – and thus needing to operate at a pharmaceutical grade and quality standard which is cost prohibitive for the hemp sector. Entering this market would further take advantage of THC Global’s significant expertise, assets, and infrastructure in agriculture and biotech in dealing with cannabis.

Entering the Canadian cannabis market

THC Global has also secured an 11-acre property in Nova Scotia, Canada which has been given a ‘letter of readiness’ from Health Canada for developing a cannabis cultivation facility. THC Global will look to develop this project over the coming months and hopes to be in revenue generating production in late 2020.

From the Company’s Nova Scotia project, THC Global will explore the development of an adult use product line in addition to its core medicinal cannabis activities.

Additionally, THC Global will look to commence exportation from Australia to Canada of its medicinal cannabis product for supply to in the Canadian market. THC Global’s significant competitive advantage makes competing in Canada against the major market players an interesting opportunity for THC Global to explore.

Next steps

With commercial scale production of medicinal cannabis commencing from its Australian facilities by early next year, THC Global expects to see strong revenues from medicinal cannabis sales in the coming year.

THC Global is in prime position to be a major player in the global medicinal cannabis market, having secured a number of key production assets and a strong executive and operational team to deliver medicinal cannabis products to Australian patients and to the global export market.

Ken Charteris
THC Global Group (ASX: THC)
ceo@thc.global

Please note, this article appeared in issue 11 of Health Europa Quarterly, which is available to read now.

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