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One million square foot cannabis production facility to be built in Australia
The Northern Rivers Project is a partnership with the Richmond Valley Council—the local government in New South Wales, Australia—and PUF Ventures Australia—a recently formed majority-owned subsidiary of PUF—to construct a one million square foot greenhouse operation, with large-scale manufacturing, processing and office facilities for the cultivation, production and manufacture of medical cannabis and associated products.
MYM will own 35% of the Northern Rivers Project, which, at full scale, will have the capacity to produce 100,000 kilograms of high quality cannabis per year, worth between C$800 million and C$1.1 billion (based on current pricing metrics in the Australian cannabis marketplace).
Australia has introduced progressive medical cannabis laws in the past few years, and are essentially where Canada was four years ago. Assuming recreational cannabis becomes legal and with a population of more than 24 million people, it is estimated that the cannabis market in Australia will grow to C$9 billion over the next 7 years making it a very attractive market. Being one of the first large-scale production facilities in the Australian market, MYM and PUF could capture a significant portion of that potential revenue. By entering this market through a strategic partnership with the local land-owning government, MYM is positioning itself to become a leader in both Australian and global cannabis production.
The Northern Rivers Project includes a land purchase option agreement with the Richmond Valley Council for a 27-hectare parcel of land near the town of Casino in northern New South Wales, Australia. This is a landmark agreement whereby the council will provide the land for five years at no cost, with an option for Northern Rivers Project to purchase the parcel on favourable terms after the fifth year. The Richmond Valley Council has been extremely supportive of Northern Rivers Project’s growth strategy and vision and is committed to improving local economic and employment opportunities. The purchase agreement and associated partnership with the Richmond Valley Council will allow the Northern Rivers Project to enter the cannabis market on a solid footing with the full support of the local political and governing bodies. Having the largest medical cannabis facility in the southern hemisphere in Richmond Valley is expected to draw other investments in research, education, manufacturing, tourism, and other sectors.
Vaughan Macdonald, General Manager of Richmond Valley Council, stated that they are very excited to be working together on the Northern Rivers Project with international partners and fully support the development of this important new industry which will significantly add to gross regional product, create approximately 300 direct new jobs in the local economy, and lead to other follow-on local and regional employment opportunities.
Michael Horsfall CEO of PUF Ventures Australia Inc. said, “Having MYM Nutraceuticals and PUF Ventures Canada as partners in the project we have a two companies who can deliver in a massive boost to economy of Casino ‘the Beef Capital of Australia’ and bringing in technology, jobs and training to make Casino also the Medical Cannabis capital of the Southern Hemisphere.”
This unique partnership between a government and corporation partnering in a cannabis operation is very familiar to MYM, as it is very similar to the first-of-its-kind Canadian partnership MYM formed with the City of Weedon earlier this year to build a 1.5 million square foot greenhouse facility in Weedon, Québec.
Details on the Northern Rivers Project – MYM plans to construct a one million square foot greenhouse operation, with large-scale manufacturing, processing and office facilities for the cultivation, production and manufacture of medical cannabis and associated products in Australia. The construction of the facility will be completed in stages at an estimated total cost of C$50 million. The first phase of the project is to cover approximately 300,000 square feet, which upon completion will be the largest medical cannabis greenhouse in Australia. Based on current construction timelines, permitting and various Australian approvals, the first crop is expected to be planted in the fourth quarter of 2018. PUF will seek financing to cover the costs of the project from both local and international partners.
At full scale, the new facility will have the capacity to support annual production of 100,000 kilograms of high-quality cannabis, which, based on the current market price for high quality medical cannabis in Australia of between C$227 and C$315 per ounce or C$8000 and C$11,000 per kilogram, equates to an associated annual revenue generation potential of between C$800 million and C$1.1 billion. MYM’s analysis suggests these prices will hold or likely increase due the higher-margin, high-quality medical-grade cannabis grown. Total operating costs are estimated to be between 20-25 percent of gross revenue.
In addition, PUF Ventures Australia has entered into to a purchase option agreement with the Richmond Valley Council for a 27-hectare parcel of land near the town of Casino in northern New South Wales, Australia. This is a landmark agreement whereby the council will provide the land for five years at no cost, with an option for PVA to purchase the parcel on favourable terms after year five. The cost of the parcel at year five will be based on the current value of the land and not the reassessed value at the future date. In addition, PVA will be entitled to credits for money spent on land infrastructure.
“Entering into this partnership is yet another step towards building MYM into a global leader in cannabis production. Getting in on the ground level of a market as large as Australia represents a massive opportunity for MYM,” said Rob Gietl, CEO of MYM. “Our experience in dealing with all levels of government will certainly pay off, as there are many similarities between the Weedon, Québec project and the Northern Rivers Project in New South Wales.”
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