The Hydroponics Company Ltd (ASX:THC) is at the start of a journey that will provide access to high-quality legal medical cannabis and enable many to lead better lives by relieving pain and suffering.
Interim chairman Steven Xu said that THC’s success would be judged not only on successful corporate actions and great deals, but also on the benefits and developments it brings.
“A strong share price, satisfied shareholders and healthy dividends will naturally follow,” he said at the company’s inaugural annual general meeting.
“The development, production and supply of medical cannabis presents tremendous opportunities for growth for THC.
“Having assessed many medical cannabis companies worldwide for investment potential, I identified THC as providing a measured investment opportunity through its existing revenue prospects and clear direction,” Xu said.
Interim chairman’s report
Following are extracts from the interim chairman’s report:
It is less than 18 months since the provision of medical cannabis was legalised via changes to Australian legislation.
Since listing in 2017, THC has moved forward to bring world’s best product to Australia, while simultaneously establishing local capability to build local supply and export potential.
My fellow director Alan Beasley has researched the benefits of alternative medical treatments, including medical cannabis, for over a decade and this is a personal journey for him.
We believe medical cannabis will be a game changer for palliative care patients, sufferers of
Parkinson’s Disease, Tourette’s Syndrome, epilepsy, appetite loss and nausea for cancer patients and many other ailments.
Current medicines do not presently relieve these ailments or otherwise have side effects which may not be present in medical cannabis and can be used alongside current treatments.
Register has grown 700%
Our register has grown by over 700% since listing in May 2017 and THC now has close to 5,500 shareholders, up from 750 at listing.
Through our acquisition of Canndeo, we inherited over 17 years’ experience in the breeding, variety selection and growth management of Cannabis sativa.
This knowledge will be applied to the research, development and production of medical cannabis by THC.
We have been granted two of the three licences necessary.
The licences are issued by the Office of Drug Control and we look forward the grant of the third licence.
Growing facility in Queensland is ready
Our facility in Queensland is ready to commence cultivation of our pilot crop of medical cannabis, which will start immediately upon receipt of the appropriate government approvals.
The site has been developed to meet increasing demand for high-quality medical cannabis products for local and export markets.
Stage I of the development includes greenhouses for indoor cultivation and growth of medical cannabis, a drying and shredding facility for the initial processing of the dried plants, and an extraction laboratory for the processing of crude extract from the shredded plants.
The site will also provide an onsite laboratory for the development of new strains, as well as testing and quality control of harvested products.
The site, when fully optimised, will be scalable to meet the demands of a growing market.
Supplier agreements secured
THC has reached out and secured agreements with two leading suppliers of medical cannabis – Endoca in Denmark and BOL Pharma in Israel, each with many years’ experience and knowledge in the production of medical cannabis.
Import permits have been granted to allow the first import by THC of medical cannabis from our European partner Endoca.
Patients in Australia will have immediate access under the existing government Special Access Scheme or through an Approved Prescriber and we expect the first products to arrive from Endoca shortly.
THC will continue investigating National Access Clinics to the extent allowed by Australian regulation.
We will be working with Wesley Medical Research in their conduct of research in Tourette’s Syndrome.
We will provide medical cannabis from BOL Pharma for this purpose with the trial to commence in the second quarter this year.
BOL Pharma will also supply THC medical cannabis for general patient access once their local regulations permit and supply agreements are in place.
THC is keen to grow its Canadian business and has commenced a process to identify businesses that offer a synergy to THC.
Through THC’s acquisition of Crystal Mountain, our Canadian business, we have revenue from manufacturing, supply and distribution networks with strong prospects for growth.
We are working diligently to increase their product range, expand warehouse facilities and improve the online presence. We have recently expanded the sales force.
THC continues to conduct due diligence and negotiate terms for the acquisition of an additional Canadian company in the same space.
This business is complementary to the existing Crystal Mountain-Dragon Vision business and provides exposure to the rapidly growing licensed producers in the eastern states of Canada.
The future for THC is positive. We are working in a nascent disruptive industry, that will develop and grow exponentially.