Althea Group (ASX: AGH) subsidiary Peak Processing Solutions will immediately start commercial operations at its high-tech Ontario facility after securing a cannabis processing licence from Canadian authorities.
The Standard Processing Licence from Health Canada comes just six months after Peak completed its unique 3,716sqm facility designed to manufacture and distribute cannabis-infused beverages, concentrates and topicals.
The regulatory breakthrough coincides with Peak signing an agreement to produce and distribute beverages containing 5mg of tetrahydrocannabinol (THC) on behalf of another Canada-based group, Blum Beverage Company Inc.
This adds to canned beverage deal with Collective Project Limited, the cannabis-focused sister company of Collective Arts Brewing Limited.
Management believes the latest agreement bodes well for accelerating negotiations with other customers who are now aware that Peak has cleared the regulatory hurdles required to serve them.
Peak will also manufacture 'Cannabis 2.0' products on behalf of third parties and supply medicinal products to Althea, which has traditionally relied on supplies from major Canadian player Aphria which withdrew its investment in the company in October 2019.
The new licence also allows Peak to package dried cannabis flower for medical and recreational markets.
Althea CEO Josh Fegan (pictured top) says the group is very pleased that Health Canada has issued the processing licence.
"This is a major milestone and will allow Peak to immediately commence production of cannabis-infused canned beverages for Collective Project and Blum, sign further customers who were waiting for the licence to be granted, and start supplying our own pharmaceutical operations with finished (Althea) products at a drastically lower cost than we currently pay to third party suppliers," he says.
"We are excited by the potential to serve the burgeoning Cannabis 2.0 market and look forward to providing updates on our progress."
AGH shares have been on a tear lately after Australia's Therapeutic Goods Administration (TGA) made an interim decision in favour of over the counter medicinal cannabis sales, and rose a further 10 per cent this morning to $0.64 each by 11:47am AEST.
The shares have almost doubled since the beginning of August.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia