Canadian Firm Invests in Massive Australian Cannabis Venture
The economic promise of medical cannabis in Australia has taken some time to realize. So far, the few legal cannabis production facilities in the country have created only a handful of jobs.
However, if Canadian cannabis giant PUF gets its way, Richmond Valley in the state of New South Wales could soon become the home of the largest cannabis cultivation operation in the Southern Hemisphere.
Through an Australian subsidiary, PUF has agreed to a strategic partnership with the Richmond Valley Council in the state’s Northern Rivers region to construct a nine-hectare (roughly 22-acre) greenhouse operation. The facility will feature substantial manufacturing, processing, and office facilities for the cultivation, production, and manufacture of medical cannabis and associated products in Australia.
“We are continuing our strategy of global expansion by building a state-of-the-art, 1 million-square-foot facility which, when complete, will be the largest cannabis cultivation operation in the Southern Hemisphere and one of the largest in the world,” Derek Ivany, president and CEO of PUF, said in a statement.
“Our analysis shows that the cannabis market in Australia is approximately where the Canadian market was 4 years ago,” Ivany continued. “By entering this market through a strategic partnership with the local land-owning government, we are positioning PUF to become a leader in both Australian and global cannabis production.”
When up and running, PUF anticipates the facility will produce 100,000 kilograms of cannabis annually.
Richmond Valley Council’s general manager, Vaughan Macdonald, described the deal as a “game-changer” for the region.
“We are very excited by the prospect of working with an international company like PUF to support the development of this important new industry which will significantly add to our gross regional product, create approximately 300 direct new jobs in our local economy, and lead to other follow-on local and regional employment opportunities,” Macdonald said in a statement.
“This locally supported project will go a long way to meet our commitment to reduce unemployment through economic development and improve the prosperity of our community,” Macdonald said. “We look forward to working closely with PVA (PUF Ventures Australia) to bring this project to reality and working to create a new agricultural industry of medicinal cannabis in our region and across Australia.”
PUF is getting an exceptionally good deal on the property. The farm will be set up on a council-owned 27-hectare parcel of land in North Casino. And the Richmond Valley Council is providing the land for five years at no cost, with an option for the company to purchase “on favourable terms” at the end of that period.
PUF has also announced ambitious profit projections and optimistic forecasts about the size of Australia’s cannabis industry, going so far as to speculate
in their press release about the size of an eventual adult-use market despite the fact the country’s medical program is off to a slow start.
“Assuming recreational cannabis becomes legal and with a population of more than 24 million people, roughly two-thirds of Canada’s population, it is suggested that the cannabis market in Australia could grow to $9 billion over the next 7 years,” the press release said.
Recreational cannabis isn’t necessarily a pipe dream, but suggesting it could happen in a short time frame is optimistic. And the exportation of medical cannabis products from Australia is currently prohibited, meaning a giant production facility might find itself producing more than it can sell through the domestic market.
Australian agriculture and farming publication The Land wrote critically
about the agreement, calling the proposed facility “monstrous” and noting that PUF’s partner, AAA Heidelberg, still hasn’t received the required federal license from Health Canada to produce medical cannabis. PUF also hasn’t yet submitted its Australian application for medical cannabis licensing and permits.
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