Althea's wholly-owned subsidiary, Peak Processing Solutions, is on the brink of being licensed to produce an extended array of cannabis 2.0 products.
Althea Group Holdings Limited (ASX:AGH) has announced that its wholly-owned subsidiary, Canadian-based Peak Processing Solutions, has submitted its evidence package to Health Canada, which brings the company to the final stages in the application process to receive its Standard Processing Licence.
The evidence package that was submitted to Health Canada consists of a full video tour of every room within the new facility, and thanks to Health Canada's non-binding service standard under the Cannabis Act, Peak's application will be processed within 60 days.
Althea's Peak Processing facility sits at 3,716 square meters and is located in Tecumseh, Ontario. The facility is one of the first large-scale independent processing facilities that will allow for the manufacturing and distribution of cannabis 2.0 products such as cannabis edibles, concentrates, topicals, and beverages, all of which were recently made legal in Canada in October of last year.
Cannabis 2.0 products bring in much larger profits when compared with dried flower and cannabis oils, and due to their very recent legalization, there are few licenced producers in Canada that are able to manufacture such products. As such, Althea believes that the Canadian 2.0 market is very much untapped.
Additionally, as has previously been identified in Deloitte's report, 'Nurturing new growth: Canada gets ready for Cannabis 2.0,' cannabis edibles and concentrates are also likely to reach consumers who may have previously been reluctant to consume dried flower.
The President and Founder of Peak Processing Solutions, Gregg Battersby said that: "Submission of the evidence package to Health Canada is an exciting milestone for Peak following completion of the construction of our world-class facility. I am confident that the combination of Peak's highly capable leadership team, unique production capabilities and focus on quality, will position us as the leading supplier to the rapidly growing Cannabis 2.0 market in Canada."
Based on internal forecasting and modeling, we have projected to achieve revenue of $25 million within 18 months of being granted our license from Health Canada. President and Founder of Peak Processing Solutions, Gregg Battersby
Upon licensure from Health Canada, Peak can immediately start servicing its waiting list of potential clients, with the facility offering Peak a unique opportunity to produce products for beverage and alcohol companies so that they may compete and launch products into the Canadian adult-use cannabis market.
Althea CEO Joshua Fegan said: "This is a huge development for Althea, probably the most recognised medicinal cannabis brand in the world, outside of North America. Peak is the first production facility in the AGH group of companies and can supply a full range of final dose form medicinal cannabis products to Althea, which mitigates our reliance on third-party manufacturers and reduces our cost of goods (sold) dramatically."
"Our Canadian team also have some exciting product technologies, especially around product administration and the onset/offset of active ingredients, which Althea can leverage. Product supply from our Canadian facility will commence as soon as practical."
The Peak capital expenditure program is complete, and the Company maintains a strong balance sheet with approximately $15 million cash on hand and zero debt.
To learn more about Althea Group, visit the company HQ here.
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