Australia’s The Hydroponics Company (ASX: THC) emerged from a trading halt last week with the news it had acquired production facilities from LEO Pharma, along with its associated freehold land and building.
THC says the $2.55 million it has spent now gives it the largest pharmaceutical botanicals extraction and refinement plants in the Southern Hemisphere.
LEO Pharma, which focuses on dermatological treatments, says it parted with the Southport, Queensland facility as it no longer matched its future strategy for manufacturing of products.
THC stated the acquisition would assist the company in its goals of evolving into a globally significant manufacturer of medicinal cannabis products for both Australian local and future export markets (when that opportunity eventuates).
“This is a game changing investment undertaken by THC providing it with large scale, state-of-the-art biomanufacturing capabilities required to lead Australia’s medicinal cannabis industry,” said THC Chairman Steven Xu. “The addition of this acquisition is a major component of our roll-out strategy that will generate substantial growth for the Company.”
The Hydroponics Company listed on the ASX in May last year and states it has 600 products and 9 registered trademarks. In addition to its medical marijuana cultivation and processing related goals, it manufactures and distributes hydroponic equipment, plus related materials and nutrients along with designing, constructing and managing small to large-scale greenhouses.
Its subsidiary, Canndeo was granted a license in October last year relating to the cultivation of cannabis plants for medicinal purposes.
The market reacted favourably on the production facility acquisition news, with THC shares closing up 11.5 per cent to 68 cents on Thursday afternoon. The upward swing continued into Friday, when it closed at 70c. The company delivered more positive news on Friday, stating its quarterly revenues increased by 31 per cent compared to the December quarter, with expectations annual revenue will reach $4.3 million.
Australia has been a hive of activity on the cannabusiness front over the last week or so. Among the notable developments we’ve mentioned were Zelda Therapeutics moving ahead on its insomnia clinical trial, AusCann and Canopy Growth getting cosier and Canada’s Aphria announcing its first medical cannabis shipment to Althea Company had been delivered.