THC’s unaudited trading revenue for 2019 was $4.79 million, which represents 80% year-on-year growth on 2018 audited revenue.
Chairman Steven Xu said: “Our efforts over the past two years in refreshing the company strategy, strengthening the team capability and working through the Australian cannabis regulatory scheme, securing the many licences, permits and authorisations required culminated in us producing our first medicinal cannabis medicines in December 2019.
“This was a significant milestone for our company and has laid the foundations for our growth in 2020 and beyond.
“With a fully vertical integrated business model, we are capable to supply high-quality low-cost medicines to Australian patients and the global export market.”
The company’s balance sheet is looking strong leading into 2020 with audited net equity of $22.3 million.
“Affordable and accessible medicinal cannabis”
Chief executive officer Ken Charteris said: “After over two years of hard work from our team and patience from our shareholders, we are now just weeks away from our first supply of high-quality, affordable and accessible medicinal cannabis medicines to Australian patients in need.
“This is a critical milestone both for our company and for those patients in Australia struggling to find a legal medicinal cannabis medicine that they can afford.
“Getting to this stage has not been an easy process, with extended periods of time where we’ve been forced to wait for licences, permits and other approvals to proceed on our operational plan.
“However, we’ve now achieved something that is highly regarded and quite rare in the global cannabis sector – to have a large-scale cannabis extraction facility with government-issued Licence to Manufacture Therapeutic Goods (GMP) licensing able to produce product meeting the EU GMP standards.”
Strong support from Australia
Charteris said that the company had strong support from the Australian Government, with the first Canndeo branded medicinal cannabis medicines produced at the Southport Manufacturing Facility in Queensland in quarter four of 2019.
He said: “Whilst there is more work to be done, we are confident that THC Global will be a major supplier for the Australian Government’s estimated 100,000 annual prescription demand in the near-term.
“By offering a more affordable and accessible option to prescribers, we expect to see the number of patients actively using medicinal cannabis in Australia to grow significantly.”
Building Canndeo brand
THC has now accelerated medicinal cannabis production with the importation of crude cannabis extract and ramping-up of cultivation capacity at its Bundaberg facility to support the production of medicines.
Xu said: “Through our Canndeo brand, we look forward to delivering first medicines to Australian patients in the coming weeks.
“Through 2020 we expect to supply Canndeo products to an initial 6,000 Australian patients.
“In parallel, we continue expanding our global footprint for future medicines export, both as a local supplier and as a wholesaler, initially focussing on Canada, New Zealand, and Europe.”
Canadian revenue growth
Charteris said: “We expect to receive licences in Canada to enable the company to be a local medicinal cannabis supplier for patients with valid subscriptions, in addition to offering our products to Canadian partners under wholesale agreements.
“Our hydroponics equipment retailing and wholesaling business, Crystal Mountain, performed extraordinarily well in 2019 with a successful repositioning of the business towards smaller cannabis cultivators who were not well serviced in the market.
“This repositioning led to an approximate 80% year-on-year revenue growth.”
“Well-positioned among peers”
While current macroeconomic conditions and the cannabis stock market appears challenging, the company is confident the cannabis market is continuously growing, with more countries implementing medicinal cannabis programs.
Xu said: “THC Global is well-positioned among the peers due to its pharmaceutical GMP production capability, strong team with pharmaceutical industry experience and scalable capability to address the growing market.
“With full ownership of our production facilities, we are confident that we can grow our global medicinal cannabis and hydroponics equipment operations notwithstanding the current depressed market conditions.”
Charteris said he did not expect to see a material effect on the company’s operation as a result of the COVID-19 pandemic.
He said: “Our company is in a very strong position financially and we’re confident that we will continue our operations towards delivering high quality, affordable and accessible medicinal cannabis medicines to Australian patients and the global export market.”