CANN Group plans to have the first harvest from its medicinal cannabis-growing operation near Mildura in the first quarter of next year.
The company on Wednesday provided a market update to the Australian Stock Exchange which said it was pushing ahead with staged construction of the $130 million, 34,000-square metre facility outside Mildura.
Cann Group announced in March last year its intention to build the facility, capable of cultivating and producing 70,000kg a year for domestic and export markets.
At the time, it was said to be Australia’s largest growing facility, would create 170 jobs and generate annual revenues of between $160 million and $200 million based on the then wholesale price of cannabis.
However, in November, the group said it was forced to undertake a detailed review of the Mildura project due to uncertainty in the global medicinal cannabis industry.
In Wednesday’s announcement, Cann Group said the initial stage of the project would be in two stages with stage 1A providing a capacity for 12,500kg of cannabis a year.
The plants are expected to be in the facility by the end of this year for the first harvest target of early next year.
“This expected timeline is subject to the completion of detailed design and construction review, funding and necessary approvals,” the ASX statement said.
“The company has, to date, expended approximately $50 million in respect to the facility (including the purchase of the property).
“Stage 1B will increase annual capacity for 25,000kg, with the timing of commissioning to be linked with volume demand growth that provides strong confidence in capacity utilisation.”
The company said the staged expansion was designed to allow higher production as Australian and export markets continued to develop.
“The revised construction plan more closely aligns capacity with anticipated demand and lowers capital investment risk,” the ASX statement said.
