Australia’s biggest medicinal cannabis plant to be built in secret Melbourne location

Australia’s biggest medicinal cannabis extraction and contract manufacturing plant will be built at a secret location in Melbourne’s south-east in a $50 million project aiming to help the local industry become more self-sufficient.


The facility will be owned, funded and operated by The Valens Company, a Canadian medicinal cannabis business listed on the Toronto Stock Exchange. However, an Australian distributor of medicinal cannabis, Cannvalate, is managing the project, hiring staff and fitting it out with the necessary equipment.


The 4500 square metre facility will process raw material and produce a range of finished medicines, including soft gel capsules, tablets and ointments. It will have double perimeter fences, 24 hour CCTV and a range of other security measures, including a vault where finished products will be stored.


“It will be very, very secure,” said Cannvalate chief executive Sud Agarwal.


Under licensing requirements, the plant’s address cannot be disclosed but it will be in close proximity to cannabis cultivation sites.


“It’s going to be the biggest manufacturing plant in Australia, probably by a factor of at least five times. So it’s going to completely change the dynamic of cannabis extraction and cannabis manufacturing,” Dr Agarwal said.


New figures from Australia’s Therapeutic Goods Administration show that demand for medicinal cannabis prescriptions hit 3378 in April, which is more than triple the total in April last year of 1108. Dr Agarwal said Australia was the fourth largest medicinal cannabis market in the world behind the US, Canada and Germany.


However, the vast majority of medicinal cannabis currently used in Australia is imported.


“Probably 95 per cent plus of all the stuff that’s getting given to Australian patients, is imported from Canada or Europe,” Mr Agarwal said.


Construction on the facility is expected to start before September, with completion scheduled for the middle of 2021.


Cannvalate, which has flagged plans to list on the ASX, has also signed a five-year distribution agreement with Valens. The Canadian company confirmed its plans to enter the local market this month, describing Australia as “the second largest cannabis market outside of North America”.


“It’s going to completely change the dynamic of cannabis extraction and cannabis manufacturing.” Cannvalate chief executive Dr Sud Agarwal


Peter Crock, chairman of the industry group Medicinal Cannabis Industry Australia and chief executive of the $150 million ASX-listed medicinal cannabis company Cann Group, said long term forecasts indicated Australia could eventually have 300,000 to 600,000 patients using medicinal cannabis.


“Accelerating access for patients is really what everyone’s working towards and this is going to be a significant development in that, to have cost-effective medicines available for patients,” he said.


“It will definitely be one of the purpose-built facilities of scale and so that is going to be important. It definitely has a role to play and that level of investment will be significant,” he said.


Joshua Fegan, CEO of the ASX-listed medicinal cannabis company Althea, said about 70 per cent of Althea’s patients used medicinal cannabis for pain management, with the rest using it for conditions including PTSD, anxiety and insomnia.

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