We Can't Tell You Where The Biggest Medicinal Cannabis Plant In Australia Will Be Built

A $50 million cannabis cultivation facility to boost the local Australian industry will remain hidden.

Melbourne's south-east will soon receive a mysterious visitor in the form of Australia's biggest medicinal cannabis extraction and contract manufacturing plant in a A$50 million project designed to create a more self-sufficient local industry.

The landmark deal will give Canadian medicinal cannabis business The Valens Company – owner, funder and operators of the facility – unprecedented access to Australia's cannabis market.

Working alongside Australian owned Cannvalate Pty Ltd to distribute cannabis, the Australian owned business will also manage the project in addition to equipment fit-outs and staff hiring.

"This partnership provides Valens with strategic access to Australia's strong and fast-growing cannabis market," said Tyler Robson, CEO of The Valens Company

"With a proven track record, strong knowledge of the local market, and a leading distribution platform in Australia, Cannvalate is an excellent partner for us to build our presence in this pivotal hub with significant long term growth opportunity."

Under current licensing requirements, the exact location details of the 4500 square metre facility cannot be disclosed, creating a pseudo-Area-51 for the potential employees working inside.

Due to the illicit nature of cannabis and its attractiveness to potential criminals, the Office of Drug Control Australia requires that the location of a cannabis cultivation site "is not readily identifiable".

For this reason, security has been given the highest priority, with Cannvalate chief executive Sud Agarwal describing the facility as "very, very secure" thanks in part to the double perimeter fences, 24-hour CCTV and even a vault for finished products.

It seems in the age of medicinal cannabis; it's the drug that is locked up, not the person.

cannabis extraction

The facility will process raw cannabis material for the production of medicines including capsules, tablets and ointments.

"The Australian market is the fastest-growing, pure-play medicinal cannabis market in the world and is unique in that oil-based derivatives represent over 95% of the total products sold," Dr Sud Agarwal, the chief executive of Cannvalate.

Valens has an opportunity to "become the primary extractor and contract manufacturer for licensed producers throughout Australia and Asia-Pacific," a US$40 million market set to explode by US$170 million in the next year, with an estimated value of US$1 billion by 2023.

Demand for medicinal cannabis prescriptions has tripled since last year from 1108 in April 2019 to 3378, according to the Australian Therapeutic Goods Administration.

Construction of the facility will commence shortly, with operational capacity by 2021, with initial revenues expected as early as the third quarter of 2020.

The Valens Company is hopeful a public submission by the Australian Department of Health in January 2020 will lead new regulations from the TGA.

The submission suggested a review of the lower dose CBD medicines, calling for a possible relaxation of the rules allowing certain types and amounts of CBD products available to adult patients without a prescription.

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Elliot Nash
Elliot Nash

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