Farm to Pharma – Exclusive Interview With THC Global CEO Ken Charteris

The Green Fund recently sat down with Ken Charteris, the CEO of THC Global to discuss the company's future plans in the global cannabis arena.

THC Global Limited (ASX: THC) is a medicinal cannabis producer with a vertically-integrated business model and a "farm to pharma" strategy.

It's been a massive year for THC Global. From purchasing the largest bio-pharma extraction facility in the Southern Hemisphere, to being granted the "most significant cannabis Manufacture license in Australia," the company has been firing on all cylinders.

Naturally, we decided to sit down with the management of THC Global—a company we've described as an "extraction powerhouse"—as we delve into the world of Medicinal Marijuana this month.

To learn more about the company, The Green Fund met with the CEO of THC Global, Ken Charteris, for an exclusive interview.

THC Global

Ken Charteris has been active in the biotech and pharmaceutical industries over the past three decades as a CEO, Managing Director, and Chairman.

Prior to being involved with the cannabis industry, Charteris had worked primarily in Europe in a number of different areas, including merchant banking, acquisition mergers, biotech, and startups. From there, he joined what was then known as The Hydroponics Company, before it eventually became THC Global.

"In the early days, we were a hydroponics company. People couldn't understand the value of what we were doing," Charteris said.

"The last 12 months were really hard to ensure people understood the value. Now, we've got really clear deliverables so that they can see it. They go, 'Wow, they got all the licenses. Hell, they got all that.' They're implementing."

THC now occupies the unique position of being one of just a few companies with all three medicinal cannabis production licenses; Research, Cultivation, and Manufacturing. This, Charteris argues, puts THC Global a league above all other competitors and ticks all the boxes for their "farm to pharma" model.

"Everybody that's talking about hemp really doesn't understand the regulations and the rules. And that's a real big downfall for investors, right now."

"If you are looking at our business, we're a cannabis and hemp company who can actually, legally extract hemp under the regulations. And if you look at the capacity of our facility, it can handle massive volumes."

"So not only will it be GMP food-grade isolates out of hemp, it will be open field grown, which is even lower cost. So it's a larger plant, with a lot more active ingredients in it. And guess what? Now, we've also got the capacity," he said.

 

THC Global
THC Global's Southport facility

 

The Southport Facility

The new capacity for growth which Charteris refers to is THC's recent purchase of the Southport Facility—the largest bio-pharma extraction facility in the Southern Hemisphere—which was also recently awarded a cannabis Manufacturing license.

Labeled the "most significant cannabis Manufacture license in Australia," the Southport Facility is now capable of producing more than 12,000 kg of Good Manufacturing Practices (GMP) compliant Active Pharmaceutical Ingredient (API) isolate per year.

The Green Fund was fortunate enough to have had a tour of the Southport labs in February 2019, which THC purchased for "cents on the dollar" according to Charteris. The previous owners of the labs, Leo Pharma, were left with a redundant asset following a Phase 3 drug trial failure, allowing THC to pick up the facility—which has an insurance value of $35 million—for just $2.55 million.

"If you're planning on doing hemp extraction, you'll need a lot of money, and you've still got to get an ODC permit. So, see you in two years' time when we are ready to go."

– Ken Charteris, CEO of THC Global

The facility is also designed to produce full-spectrum APIs, which Charteris states will be "the next generation of medicines that you require." This is because full-spectrum is increasingly considered superior to isolate APIs due to its ability to induce the entourage effect.

Charteris believes full-spectrum medicines are going to be essential, "particularly if you're exporting to European countries or even to Canada."

THC has already set up shop in Canada through its subsidiary Vertical Canna, which has a cultivation project in Nova Scotia that is estimated to yield 37,000kg of dried flower annually.

Though it's not all about the large overseas markets, as there's still a largely untapped demand for high-quality medicinal cannabis here in Australia. Figures suggest there are at least 200,000 patients in Australia eligible for high-grade medicinal cannabis products, though the TGA states there just under 9000 prescriptions. Through their new Southport facility, Charteris states the company could produce more than enough cannabis to meet all of Australia's medicinal demands.

"If I had to provide medicines for the whole of Australia, and formulas, and APIs, I could do the forecast and percentage of patients, call it 250,000, and I'd still have capacity left over at Southport," Charteris said.

And you can bet your bottom dollar that THC is moving at lightspeed to get the newly licensed facilities operational. Charteris estimates that the site will be up and running within just three months.

"I've got my team working on a 90-day plan for validation. Then, have ODC come back in, and get it GMP certified. So now, it'll license as a licensed manufacturer. My team will be going from looking at bits of paper to actually implementing. So we'll be, hopefully, validating and processing validated material within the next 90 days."

"We're doing what's called bulk validation, which will give us our TGA certificate and energy certificate, and then, go to a large scale after that," he said.

The company has also recently entered into a partnership with EVE Investments, who will be given access to THC Global's medicinal cannabis. The cannabis will be used by a subsidiary of EVE named Meluka Honey, who plan to incorporate cannabis into their tea tree extracts and honey products.

 

The Bundaberg Facility

Aside from the mammoth Southport Facility, THC also operates another site in Bundaberg, Queensland, for which THC received permits to commence cultivation and R&D activities in December 2018.

While the Bundaberg site is much smaller than the Southport facility, it does include a minor-scale manufacturing facility for the extraction of oils and other concentrates. This is of crucial importance, as THC intends to use this facility for the creation and validation of its unique strains, genetics, and trials through its subsidiary Canndeo.

"Bundaberg has this great place in the sunshine and water availability that's well suited for cannabis. And also, it's quite a well-developed agriculture area. It's got great resources, water, great sun access. So the skill base for what we call farm management is well-developed in Bundaberg rather than running into unknown agricultural areas," Charteris said.

"Bundaberg was definitely a great choice for us. On top of that, what we've been doing in the last two and a half years is to build up our own strains. We have brand genetics, which means we're not licensing or buying anybody's strain."

"Our strains are particularly bred for that area, so they're far more robust than a brought-in or imported strain from overseas."

Charteris has previously stated that THC intends to use this facility in order to producing CBD oil for the Australian market, before preparing their isolates for verification, production and distribution.

"We're in this great position where we'll be growing our first commercial crops in Bundaberg, And we're also looking at other areas up there to expand our growing," he said. 

 

Disclaimer: Past performance is not an indicator of future performance.

The Future of THC Global

Thanks to their newly purchased facilities and their full suite of cannabis licenses, THC Global has positioned itself perfectly to become a major player in the global cannabis industry. They can now truly implement their "farm-to-pharma" model and become a self-sufficient, vertically integrated company from cultivation to research and production.

The Company expects to complete product validation in Q4 2019, followed by supply into Australian and Asian study trials, and clinical trials in early 2020. The company also already has a global presence thanks to operations in Australia, New Zealand and Canada, and partnerships throughout Europe, the Middle East, and Asia. For these reasons, Charteris believes that 2020 will be the year that THC becomes a household name for the cannabis industry.

"We're pretty well going to wake up, next year, as big as the big guys, the Auroras, and the Tilrays," Charteris said.

"We'll be the lowest cost to grow and the lowest cost to extract because we're utilizing the lowest cost growing methods. We've got such a big facility. We're going full-plant extraction. It's an absolute game-changer."

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THC Global Group Limited (ASX:THC) is a medicinal cannabis producer with a vertically-integrated business model and a "farm to pharma" strategy that aims to corner all aspects of the cannabis market.  Having secured both a significant cultivation capacity over two grow sites, and an industry-leading pharmaceuticals bio-manufacturing facility with attached testing and product development laboratory, […]

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Louis O'Neill
Louis O'Neill

Louis is a writer based in Sydney with a focus on social and political issues. Having interviewed local politicians and entrepreneurs, Louis now focuses on cannabis culture, legislation & reform.

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