Canngea to construct pharmaceutical grade facility to grow and manufacture medical cannabis products

Australian startup Canngea is keen to address the global shortage of medical cannabis, setting up Australia's largest pharmaceutical grade indoor facility to grow and manufacture high quality cannabis products.

The site chose for this facility is in the Singleton LGA and it will be powered by renewables complete with a storage battery -the largest commercial battery to be installed in NSW.

A licensed B2B operator, Canngea will serve other companies in the medical cannabis industry that want to develop products to sell to domestic and international consumers.

Tesla battery in South Australia

Tesla battery in South Australia

It will construct the first facility of its kind in Australia, equipped to provide an end-to-end solution to clients - growing, harvesting, extracting, packaging, labelling and distributing client's branded products, with industry leading technology.

The world-class GMP facility, to be established in the Upper Hunter region, will also house an on-site analytical laboratory, capable of supercritical extraction, tissue culture and formulation for cannabis products, as well as automated packaging, compliant labelling, logistics and distribution.

It is on track to start construction in 2020.

Canngea Chief Commercial Officer Martin Bryden said the new facility would help to solve the problem of low quality and inconsistent cannabis products within the market.

"Canngea is Australia's only medical cannabis contract manufacturing organisation, using proven indoor grow technology to make consistent high-quality products at a competitive price," Mr Bryden said.

Anchor"With the growing legalisation and adoption of medical cannabis around the world, a huge shortage has emerged - suppliers and cultivators can't meet the demand from consumers.

"What's more, many licensed producers have set up using low-cost grow methods, such as soil and greenhouses, which impact on the quality and consistency of the cannabis products.

"Our pharmaceutical grade indoor grow and manufacturing environment, will reduce risk, increase crop yields and ensure product quality and consistency.

"With this, we will be able to undercut the wholesale market, offering products at a much lower cost per unit than the average price in the US market."

Canngea aims to significantly reduce production costs and maximise return to shareholders with the use of solar power and battery.

"Environmental sustainability is at the heart of our fully integrated 11,000 sqm facility. The design includes a strong focus on renewable energy and minimises water usage," Mr Bryden said.

"Canngea's solar powered battery solution is 10% of the size of the Tesla Big Battery making it the largest privately owned commercial battery in NSW. This coupled with our water recycling technology will significantly reduce operation costs and allow us re-sell solar power back to the grid for further revenue generation."

Australia legalised medical cannabis in 2016 and in January this year Health Minister Greg Hunt said he wanted the country to become the world's leading supplier of the drug. The Australian medical cannabis market is expected to be worth $5.5 billion by 2025, while the global market will total $66.3 billion.

Mr Bryden said Canngea was well placed to grow its market share and capture global as well as domestic consumers thanks to Australia's strict standards.

"Australia is the only jurisdiction that treats medical cannabis as a purely pharmaceutical product, unlike other countries where cannabis may also be treated as a 'natural' or herbal product or supplement," Mr Bryden said.

"And Australian standards are very stringent, which means products we manufacture will be in compliance with the requirements of major global markets, such as Canada and the European Union, and their manufacturing and packaging guidelines."