THC Global Group Ltd (ASX:THC) plans to expand its product range and move into new territories in 2021 and beyond as it boosts production at its Southport facility to meet demand from New Zealand and Canadian markets.
The company is targeting to enter the Asia Pacific market in 2021+ with identified potential markets in Thailand, Malaysia, China, South Korea and Japan.
It also sees Latin American and other international opportunities to open with the pharma over-the-counter (OTC) cannabis scale-up.
THC Global operates across the cannabis supply chain, from cultivation, extraction, and direct patient and prescriber support services.
THC Global chairman Steven Xu said: “Over the past few months we have achieved several key milestones including launching our Canndeo medicines in Australia, supplying our first prescriptions and signing new production agreements.
“We look forward to building on top of these successes in the coming months and toward supporting our target of 6,000 patients using a THC Global produced medicinal cannabis medicine by the end of 2020.”
The company has secured agreements to export into Europe, New Zealand and Canada with effect from the third quarter of 2020, with the initial products focusing on CBD medicines range.
Its cannabis medicines are now competitively positioned for direct supply into Canada after receiving Health Canada licensing for Class I, II, III devices and Natural Health Products. Canada has an established market of more than 350,000 registered patients.
It has also inked deals with leading pharmaceutical distributors for New Zealand, as well as to provide prescriber support on cbdinfo.co.nz.
The first order from Medleaf Therapeutics in New Zealand has been received, with an initial supply of 2,250 bottles at $260,000, to be delivered on October 1, 2020.
This order is expected to support up to 800 patients in New Zealand on an ongoing basis.
THC Global is competitively positioned in the New Zealand market due to the requirement from October 2020 for the supply of all future medicines into the country, including future locally sourced medicines, to meet stringent registration requirements.
These include the provision of a six-month expiry date on medicines, which will be a significant time barrier on new market entrants based in New Zealand.
The European supply agreement with Germany’s ACA Muller will see its products moving into more than 1,200 pharmacies across the European Union, with the first purchased supply into Europe expected in the fourth quarter this year.
THC Global is completing verification of Good Agricultural and Collecting Practice (GACP) supply for its external suppliers, which is a mandatory requirement for export into Europe.
The company’s manufacturing facility is Good Manufacturing Practices (GMP) licensed by the Therapeutic Goods Administration in Australia and has reciprocal recognition across Europe in meeting EU-GMP requirements.
Domestic boost with rescheduling of CBD medicines
The company is also preparing for the rescheduling of CBD medicines in Australia, which is expected in the first quarter of 2021 and is readying products for the required specific Schedule 3 registration throughout 2020.
The Pharma Over-The-Counter (OTC) CBD medicines market will open supply to Australians via pharmacies without the need for a prescription.
THC believes it is the best placed to dominate this market with a global supply chain supplemented with large-scale, low-cost cultivation options and Australia’s largest capacity dedicated cannabis medicine manufacturing facility.
The value of the future Pharma OTC CBD medicines market has been projected to potentially exceed $200 million per year.
Spike in patient enquiries at Tetra Health
In June, Tetra Health, which THC Global acquired this year, received a 30% increase in patient inquiries and this trend is expected to continue.
In line with this, THC Global is expanding Tetra Health’s clinical staff to ensure it can manage a continued increase in patients whilst ensuring a high level of patient support and care.
Tetra Health is a product-agnostic clinic, focused on medicinal cannabis prescribing, ongoing patient care and collecting real-world evidence on medicinal cannabis medicines.
It offers patients and prescribers a broad range of medicinal cannabis medicines, including THC Global’s Canndeo medicines and medicines produced by THC Global under white-labelled production arrangements, such as with Cannatrek.
Increasing GMP manufacturing facility
As a result of the significant increase in demand, both domestically and internationally, THC Global is accelerating the expansion of production activity at its GMP manufacturing facility. It operates one of the world’s largest pharma GMP extraction facilities for cannabis.
To support this, it has secured additional crude cannabis extract supply from southern Africa, in addition to the existing crude extract supply from Canada and dried cannabis flower from Australian cultivators and the company’s own cultivation facilities.
This robust supply chain, combined with cost-effective supply allows production to pivot rapidly towards in-demand Canndeo medicines and white-labelled production, aimed at better meeting patient needs, ensuring continuous supply, and continued positive revenue growth.
Its production capacity is scalable up to 1 million patients per annum, with limited additional capital expenditure.
It is currently developing the capability for the production of capsules, tablets, creams and other finished product forms.
High-volume bulk processing or white-labelled orders can also be serviced without limiting its own production.
In June, the diversified global cannabis company completed a $6.6 million placement to institutional and sophisticated investors, issuing around 22 million new shares at 30 cents per share.
It also launched a share purchase plan (SPP), for eligible shareholders to apply for up to $30,000 in new shares at the same price as the placement, to raise $3.4 million.
Funds raised will go towards working capital and to enable the acceleration of high-volume cannabis medicines production for local patients and the global export market.
THC Global chief executive officer Ken Charteris said: “We now have a stronger share register with better institutional representation and a stronger balance sheet to take us forward through this period of scaling up our cannabis pharmaceutical operations.”