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Australian Natural Therapeutics Group (ANTG) is joining forces with Canadian Asterion Cannabis and its Australian subsidiary, with the merged entity to build a $400 million medicinal cannabis growing facility near Toowoomba, Queensland.
Construction on the 75-hectare facility in the Darling Downs is scheduled to begin in the next few months. Once complete, the renewable-powered farm is set to produce more than 500,000kg of medicinal cannabis a year.
The news comes another major Australian cannabis player ECS Botanics (ASX: ECS) annoucned plans to expand its Tasmanian cannabis farm by more than 100 times its current area to 32 hectares.
ANTG CEO Matt Cantelo says the merger represents a golden opportunity for the company to reach its full potential in growing and cultivating medicinal cannabis and serving its domestic and export markets.
"We see Australia becoming the global leader in medicinal cannabis production," says Cantelo, who earlier this year signed a $92 million, nine-year deal with German company Cannamedical Pharma to export commercially-grown Australian medical cannabis flowers to Europe.
"We have the gold standard in regulatory framework, depth of research and climate for growing excellent produce - but what we haven't had to date is the option of scale. Once we get the scale we need, we will be working to ensure medicinal cannabis is more accessible to Australians.
"This has meant we could mostly meet the demand to the general market, but in the coming years we see demand will absolutely outstrip supply."
Asterion CEO Stephen Van Deventer says the merger is synergistic for both companies delivering early revenue for Asterion and scalability for ANTG.
"The merger of Asterion and ANTG fits in with both companies' short and long term strategies," says Van Deventer
"We are extremely excited with this merger as both companies have the same vision, priorities and mindset".
The new facility is expected to create 1,000 jobs in the Toowoomba region, and will take advantage of potential employees familiar with the agricultural and horticultural sector in the area.
The first 10 hectare glasshouse and manufacturing facility is due to be up and running by the end of 2022. Two more glasshouses will be built in the following years.
The merger comes after Asterion announced the commencement of its IPO in February, with the company planning to list on the Toronto Stock Exchange.
Asterion has tapped DuMoulin Black LLP as legal counsel to facilitate the IPO which will be funded by the company's recent $30 million private placement.
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