In preparation for legislative changes which may soon see cannabis products purchasable over the counter without a prescription, leading medicinal cannabis product manufacturer THC Global (ASX: THC) has partnered with Cannatrek to produce white-labeled CBD products at their high-volume Southport facility in Queensland.
As a sizable grower of medicinal cannabis with a diverse range of strains and cannabinoid levels, Cannatrek will supply THC Global which will then produce Cannatrek-branded medicines in mass over 12 months.
“This is a significant milestone for THC Global and Cannatrek, but also for the Australian medicinal cannabis industry,” said THC Global CEO, Ken Charteris.
“By utilising our Southport Facility to produce high quality medicinal cannabis medicines for Cannatrek’s brand as well as our Canndeo brand, we’re increasing the number of Australian produced medicines available to patients, and supporting the development of the industry as a whole.”
The supply arrangement will see Cannatrek supply a minimum of 240kg of dried cannabis flowers for the production of Cannatrek-branded medicines, as well as an equal supply for THC Global to produce their own Canndeo brand.
Having commenced production of cannabis products at their Southport Facility in December 2019, THC Global has quickly emerged as one of the leading players in Australia’s cannabis sector where the facility is capable of processing 120,000kg of cannabis biomass with whole plant extraction annually.
With cannabis products capable of treating common issues including anxiety, stress and pain it is expected that Australia will allow doctor-free access to low dose cannabinoid products in the immediate future where they can be purchased over-the-counter (OTC). This would represent an addressable market in Australia valued at more than $200 million annually.
Beyond their manufacturing facilities, THC Global has shored up their distribution network via the acquisition of Tetra Health in May 2020, a network of clinics that facilitate Australians with access to legal medicinal cannabis.
The acquisition was funded by $2.5m in THC shares and $500k cash and unlisted Options exercisable at $0.40 which secured the clinic network’s 600 referring physicians, 1,100 patients and 10,000 prospective patients.
Shares in THC responded well to news of the Cannatrack supply and manufacturing agreement to reach an intraday high of $0.41 in morning trade, a rise of 9.3% on the previous $0.375 close.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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