Australia

250,000 plants and 70 jobs planned for huge medicinal cannabis hub

West Australia’s remote Gascoyne region will soon be home to one of the largest medicinal cannabis facilities in the southern hemisphere, with the industry poised for budding success.

Key points:

  • More than 250,000 cannabis cultivars will be planted in the Gascoyne
  • The project is expected to create up to 70 jobs
  • Medicinal cannabis manufacturing has been projected to become a $575-million industry

Recently licensed medicinal cannabis company Elite Cannabinoids has received approval to cultivate and process a wide range of cannabis varieties at an undisclosed location more than 800 kilometres north of Perth.

The crop itself will span over 46 hectares for cultivation, and there will be an onsite pharmaceutical manufacturing facility, as well as offices, and accommodation projected to create more than 60 jobs.

Elite Cannabinoids chief executive Sebastian Cox said it was a huge win for the north-west region.

“It won’t be as big as the Lake MacLeod salt operation, but once we are operating at full capacity, we will need 40 full-time staff that will do all sorts of tasks from corporate roles to growing, harvesting, extraction and formulation of medicines, logistics, and security,” Mr Cox said.

“We also have the option to expand into more land as well so if everything goes well, we might be employing closer to 70 people in five years or so.

A man standing in the middle of marijuana greenhouse, with plants on either side of him.

Elite Cannabinoids chief executive Sebastian Cox.(Supplied: Sebastian Cox)

Some of the best growing conditions in the world

The Gascoyne region may be an arid landscape, but a combination of fertile soil and a subtropical climate has allowed the company to move away from hydroponics.

Hydroponics is a common method for growing cannabis around the world. It is well suited to large-scale greenhouses and has proven success.

However, Mr Cox said with a natural source of light, the crop would be grown organically, reducing costs significantly.

“The Gascoyne has many drawcards,” he said.

“It has some of the highest solar irradiation levels in the world, it is an isolated area — which is fantastic from a biosecurity standpoint because we don’t want pesticide or insecticide drift from a neighbouring property.

“There is security of water and lots of expansion capability.”

Mr Cox said a regenerative approach would be used at the facility.

“The whole aim is to increase nutrient cycling and carbon content within the soil,” he said.

Scale and production

The facility is expected to serve the need of patients across Australia, and has additional capacity to cater to export markets, with about 253,000 cannabis cultivars to be planted in the first phase of development.

Mr Cox said he hoped to be in production by 2023.

“We have our local building approval already and, all things going to plan, we could start construction in six months,” he said.

“The build-out phase itself could take 12 months, and another six months of commissioning and auditing.

Medicinal cannabis has $575m market potential

There are currently 31 cannabis enterprises that have approval to operate in Australia, and although the sector is still in its early stages, experts anticipate the market to boom.

According to the Australian Institute of Health and Welfare, about 600,000 Australians use cannabis for medical purposes.

Outdoor cannabis plants

The Elite Cannabinoids medicinal cannabis crop will span over 46 hectares.(Supplied: Murray Meds)

Senior analyst Will Chapman at IBIS World, an industry market research group, said there was huge potential for medicinal cannabis manufacturing in Australia.

“The government only legalised production and cultivation in 2016, so the industry is still in its youth phase,” he said.

“A lot of companies are looking to establish operations and get the infrastructure set up so once some of the barriers to consumer access come down, they can capitalise on the opportunity.

“It’s a significant opportunity because Australian producers also have access to export markets.”

In 2019, the Therapeutic Goods Administration (TGA), the body responsible for regulating medicinal cannabis, granted more than 25,182 applications from doctors to prescribe the product.

Last year, the TGA also gave the green light for low-dose cannabidiol to be available over the counter at pharmacies without prescription.

However, Mr Chapman said there was still a lot of work to be done.

“There are currently no listed products on the register of the TGA that allow medicines to be supplied legally in Australia,” he said.

“So patient access relies entirely on overcoming that regulatory barrier by demonstrating that they’re safe, effective, consistent and formulated.

“Domestic production is still ramping up and rising demand for medical cannabis products in both domestic and export markets is anticipated to support strong growth this year.

Lohit Soundarajan

Founder , Editor Tech Guy #Voxguy

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