THC Global acquires site in Canada for cannabis production

THC Global Group Ltd (ASX:THC) has completed the acquisition of a Canadian company in the process of becoming a licenced cultivator at a site in Nova Scotia, Canada.

THC Global intends to stage the development of the project with the first stage focussed on delivering profitability in the near term, with an expected 37,000 kilograms annual dried cannabis flower production volume.

Additional development will see both an increase in cultivation capacity as well as on-site processing capability to create value-added cannabis products for the Canadian market.

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The current price of cannabis in Canada is C$7.12 per gram hence the company’s 37,000-kilogram annual production volume will be worth an expected C$273 million (about $287 million).

The proposed initial stage facility is expected to have a footprint of 20,000 square feet, however, the total size of the land acquired is about 4 acres allowing for significant scalability of THC Global’s operations at this location.

Negotiations for off-take agreements are also underway for both initial dried flower production and for proposed value-added manufacturing of cannabis into other products.

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THC Global chief executive officer Ken Charteris said: “THC Global entering the Canadian cannabis market as a local producer is significant step in its global strategy.

“By identifying the right asset and securing the right team, we will now be able to enter this market with limited upfront capital outlay.

“The first stage of the project is targeted to deliver near term profitability, and we are already in negotiations to secure off-take agreements.

“The second stage development of the facility will add significant value to the company, allowing it to take advantage of lucrative business opportunities within the region.”

Purchase price

The acquisition price for 10034622 Canada Inc, the holding company for the Nova Scotia property and the applicant for the licenced cultivator status is in aggregate 450,000 shares in THC Global and C$200,000.

Securing expertise in Canada for cannabis business development

THC Global has appointed Jonathon Inkley, a construction and project management expert with significant experience in the Canadian cannabis sector as a director of Vertical Canna, THC Global’s Canadian subsidiary which has acquired 10034622 Canada Inc.

READ: THC Global Group progressing to full-scale domestic operations

THC Global also has an Australian cannabis facility in development in New South Wales, which when completed, will produce an additional 50,000 kilograms of dried cannabis flower.

Total production volume of dried cannabis flower only across THC Global’s three cultivation projects when completed and in production will be more than 88,000 kilograms per annum without considering new agricultural technologies.

Story by ProactiveInvestors