The Agriculture and Food Minister for Western Australia, Alannah MacTiernan, argues that medicinal cannabis processing, "provides a real job-creation opportunity for the South-West."
The medicinal cannabis producer, Little Green Pharma (ASX:LGP), has been awarded a $300,000 grant from the Western Australian (WA) government's Add Agribusiness Investment Attraction Fund program.
LGP were one of 25 food and beverage manufacturers who were chosen to be recipients of the funding, which has been earmarked for the construction of a new cannabis manufacturing facility in the state's south-western region.
I think COVID has put pressure on supply chains, so companies that have been importing products from outside Australia, and particularly from Canada … have seen some challenges, with some outages of product. There's also been this feel of 'let's support locally grown, let's support Australian business', so we've benefited from that throughout COVID and seen an uplift during the last two to three months. Little Green Pharma Chief Operating Officer, Paul Long
The company elected to construct the new facility in part due to the significant increase in sales experienced by LGP since the coronavirus pandemic began earlier this year.
The Little Green Pharma COO, Paul Long, explained that the company has been primarily focused on servicing the needs of the domestic Australian market, despite the growing value of the European export market.
"Since we started in August 2018 we've had just over 6,500 patients, but in the last three months alone we've seen 1,300 new patients. Expert reports show that medicinal cannabis products get to about 1 to 2 per cent of the population, so if you look at total numbers in Australia, we've got a long way to go in that growth, which is exciting for the industry as a whole," Long said.
"If you compare Australia to other countries it has moved relatively quickly, but I know if you were to speak to any number of patients they would tell you it hasn't been moving quickly enough and that there is still a huge amount of red tape which impacts both access and price," he said.
"It will however be interesting to see how the regulation evolves in the coming months now that there is sufficient locally grown product to support Australian patients, given the TGA's requirement for products produced in Australia to be GMP-certified like all other medicines, while imports from other countries such as Canada are often not manufactured under GMP conditions.
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The announcement marks the latest attempt by the McGowan government to establish the state as a key cannabis manufacturer.
In May this year, the WA state government also announced that a coal mining town in the south of the state, Collie, would soon be getting its own hemp processing plant. As part of the initiative, the WA Hemp Growers Association were also given $35,000 in funding to develop a business case for the facility's construction.
According to the state's Agriculture and Food Minister, Alannah MacTiernan, the introduction of medicinal cannabis processing, "provides a real job-creation opportunity for the South-West."
"These new medicinal cannabis processing facilities will be a first for the South-West and will help establish the region as a leader in medicinal cannabis production and processing in Australia. The project is supporting up to 40 jobs during construction and is estimated to create eight direct positions to support growing and processing of medicinal cannabis products."
"It can also provide opportunities to leverage the regional processing capability of the facility, either by local hemp growers already operating in the region or potential medicinal cannabis crop cultivators."
"We see great potential for CBD production in pharmaceuticals and nutraceuticals. [We want] to make sure that we here in WA are leading producers, not just Australia-wide but that we become major players internationally. Not only is the industry going to help millions of people around the world … it's going to drive a brilliant new industry full of interesting jobs here in the South West," MacTiernan said.
This pot stock could reach new heights in 2020 due to Coronavirus
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