Agriculture Victoria has given Althea Group Holdings (ASX: AGH) the green light to cultivate hemp in the state, while Tissue Culture Australia has agreed to assist Althea in developing tissue cultures for its proposed growing facility.
The hemp cultivation licence now enables Althea to grow and process low-THC hemp plants, which the company plans to do at its Victorian production facility, which is planned for commissioning next year.
Meanwhile, in parallel with obtaining the hemp cultivation licence, Althea has signed an exclusive agreement with Tissue Culture Australia to produce tissue culture protocols for cannabis plants.
Tissue cultures are believed to have advantages over traditional cannabis propagation in terms of yield, disease resistance and superior control over genetics.
According to Althea, tissue culture is also in demand with hemp growers seeking large quantities of high-quality plants to begin outdoor cultivation.
"Being granted the hemp cultivation licence allows us to obtain hands-on production experience with cannabis plants in a tissue culture laboratory environment, immediately."
– Althea director of cultivation Daniel Mansfield .
"We envisage our own cultivation capabilities being up to 10% more productive utilising tissue culture techniques, as it will allow us to remove the traditional mother stock and propagation areas from our forthcoming production facility which increases our flowering capacity."
"Being able to familiarise ourselves with the tissue culture processes now puts us in a stronger position for when our Victorian facility is commissioned in 2020," Mr Mansfield explained.
Althea chief executive officer Joshua Fegan noted there was a gap in the market for high-quality, pathogen-free hemp plants that have been grown from tissue cultures.
"The uptake of non-therapeutic CBD products has been strong in Europe and the US and consumers are beginning to ask questions about the source of the active ingredients going into these products," he said.
In addition to growing hemp, Althea is experiencing rising demand for its medicinal cannabis products with more than 650 patients in Australia prescribed Althea's products between May 2018 and April 2019.