Despite being behind Canada and the U.S. on the legal curve of medical and recreational marijuana adoption, Australiais taking big steps towards competing with the leading markets. Several partnerships, including one to build a one million square foot cannabis production facility in the country, are helping Australia to play catch up.
Cannabis companies experiencing positive momentum from these advances include MYM Nutraceuticals Inc. (CSE: MYM) (OTC: MYMMF), Organigram Holdings Inc. (TSX-V: OGI) (OTC: OGRMF), CanniMed Therapeutics Inc. (TSX: CMED) (OTC: CMMDF), and Supreme Pharmaceuticals Inc. (TSX-V: FIRE) (OTC: SPRWF).
It appears that Australia may be the next major nation looking to liberalize how it handles the application of cannabis with serious efforts to bolster its growing industry.
In a recent news release, Canadian firm MYM Nutraceuticals Inc. (CSE: MYM) (OTCQB: MYMMF) announced that it entered a strategic partnership with PUF Ventures Inc. (an Australian government-owned venture) for the construction of a one million square foot greenhouse facility in northern New South Wales, Australia known as the Northern Rivers Project.
This would make the facility one of the largest dedicated cannabis growing operations in the world and certainly the largest in Australia.
It seems that MYM Nutraceuticals Inc. is an obvious choice for this unique partnership. MYM is a young company, but it is already developing of some of the world’s largest cannabis greenhouses, as well as diversified interests in cannabis derivatives, formulations and distribution.
Analysts are reacting positively to the news with the sentiment that moving down this road can directly benefit other companies already dealing in legal cannabis. These include Licensed Producers, medicinal marijuana companies developing therapeutics and more diversified cannabis companies including Organigram Holdings Inc. (TSX-V: OGI) (OTCQB: OGRMF), CanniMed Therapeutics Inc. (TSX: CMED) (OTCMKTS: CMMDF), and Supreme Pharmaceuticals Inc.(TSX-V: FIRE) (OTC: SPRWF).
DOWN UNDER CANNABIS
Australia has continuously introduced progressive medical cannabis laws in the past few years, and is very much positioned about where Canada was about four years ago.
Assuming recreational cannabis becomes legal there and with a population of more than 24 million people, it is estimated that Australia’s cannabis market could grow to roughly CDN $9 billion over the next seven years. This makes Australia a very attractive market, especially for existing producers in Canada and the U.S.
Being one of the first large-scale production facilities in the Australian market, MYM and PUF stand to capture a significant portion of that potential revenue and take a first-mover position.
NOT THEIR FIRST RODEO
The Northern Rivers Project includes a land purchase option agreement with the local government for a 27-hectare parcel of land near the town of Casino in northern New South Wales. This is a landmark agreement whereby the Richmond Valley Council will provide the land for five years at no cost, with an option for Northern Rivers Project to purchase the parcel on favorable terms after year five.
The Richmond Valley Council has been extremely supportive of Northern Rivers Project’s growth strategy and vision. For the council, it’s a move to improve local economic and employment opportunities.
The construction of the growing facility will be completed in stages at an estimated total cost of CDN $50 million. The first phase of the project covers about 300,000 square feet, which upon completion, will be the largest medical cannabis greenhouse in Australia.
Based on current timelines, permitting and various Australian approvals, MYM and PUF say the first crop is expected to be planted in the fourth quarter of 2018.
If this arrangement sounds familiar, it is. MYM Nutraceuticals negotiated a similar agreement for its Weedon, Quebecgrowing facility in Canada.
Through its majority-owned subsidiary CannCanada, MYM signed an exclusive deal with the Quebec municipality of Weedon to build a 1.5 million square foot facility in 2016.
The town of Weedon itself is acquiring the 329 acres of land in order for MYM to establish its new megastructure. At completion, Weedon will be one of the largest greenhouse facilities dedicated to marijuana growth in the world, expected to produce over 150,000 kg of cannabis per year.
MYM is also developing a smaller growing facility in Laval, Quebec which it expects to have online in by the end of this year.
Along with growing and cultivation at Weedon, Laval and Casino, MYM is creating its own unique integration path with brands, formulations and distribution capacity for its cannabis-based brands that include Joshua Tree, MyHemp Skin Therapy, and HempMed.
The HempMed line features custom-made cannabis products with tailored CBD chemistries to treat specific medical conditions and symptoms. They already offer more than 20 products including tinctures, concentrates and oils, edibles, vape products and pet care products.
MYM Nutraceuticals also boats first-in-class R&D in developing the highest quality cannabis-based nutraceuticals.
The company is moving at a breakneck pace toward establishing significant production capabilities backed by fully integrated R&D, products and distribution. The addition of the Australian interests opens the boundaries and makes MYM truly international.
It appears that their Australian partners see MYM Nutraceuticals as a logical fit for their growth plans and the country is fertile ground for this stage of development.
Australia’s government is willing to embrace the legalization and integration of cannabis, at least for medicinal applications at present. The country is following other jurisdictions’ models of steady-paced adoption.
The global cannabis market is experiencing a true growth boom and there are several mostly untapped regions. Australia, while it may take time to evolve, is a good place to lay the seedbed for what may be an integral part of the global cannabis market.
MYM and PUF are certainly at the jump off point for the next major stage of growth.
POTENTIAL COMPARABLES
Organigram Holdings Inc. (TSX-V: OGI) (OTCQB: OGRMF)
Organigram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of medical marijuana in Canada. Organigram is focused on producing the highest quality, condition specific medical marijuana for patients in Canada. Organigram’s facility is located in Moncton, New Brunswickand the Company is regulated by the Marihuana for Medical Purposes Regulations.
CanniMed Therapeutics Inc (TSX: CMED) (OTCMKTS: CMMDF)
CanniMed Therapeutics Inc. is a Canadian-based, international plant biopharmaceutical company and a leader in the Canadian medical cannabis industry. CMED has an active plant biotechnology research and product development program focused on the production of plant-based materials for pharmaceutical, agricultural and environmental applications. Its subsidiary CanniMed Ltd., was the first producer to be licensed under the Marihuana for Medical Purposes Regulations (MMPR), the predecessor to the current Access to Cannabis for Medical Purposes Regulations (ACMPR). The company also owns strategic assets to service the potential medical cannabis market in the United States.
Supreme Pharmaceuticals Inc. (TSX-V: FIRE) (OTC: SPRWF),
Supreme Pharmaceuticals, through its wholly owned subsidiary, 7ACRES, is one of the first 40 federally licensed Canadian producers of medical cannabis pursuant to the ACMPR. The company operates inside a 342,000 sq. ft. Hybrid Greenhouse facility located in Kincardine, Ontario. It is the largest facility of its kind to grow with advanced HVAC and C02 enrichment using the full-spectrum sun. The company has commenced its first sales of dried cannabis to Aurora Cannabis, possibly the largest and most trusted retail brand in the Canadian industry.
credit:420intel.com
