MMJ PhytoTech Limited (ASX: MMJ) has advised that TSX-V listed Harvest One Cannabis Inc. (TSX-V: HVST), which is 59% owned by MMJ, has released an operational update on its horticultural division United Greeneries Ltd with a third party for the lease of a property in Chemainus.
The Chemainus Facility is a previous industrial lumber kiln drying plant and, due to its industrial power supply and existing useable building envelopes, is extremely well suited for a retrofit into a cannabis indoor cultivation facility. Detailed design work on the facility has already commenced along with the necessary licensing integration activities.
Due to the existing infrastructure at the Chemainus Facility, UG expects an efficient and short construction and licensing time period, with cultivation activities to commence in 2018. The initial facility design is for high quality indoor production of dried cannabis buds with a total annual capacity of approximately 8,000kg and is fully funded with the Company’s current cash balance.
The LOI also provides UG a lease option on a further 8 acres on the site, which could ultimately produce in excess of 35,000kg per year on a full build out and expansion scenario.
The Company believes that the development of the indoor Chemainus Facility and its significant immediate expansion opportunity provide a better alternative to the previously announced greenhouse expansion plans at the Duncan Facility, as the same estimated production capacity of high quality indoor cannabis instead of extraction grade greenhouse cannabis will be achieved for approximately the same capital outlay of approximately $9 million. The Duncan facility, with its 1,000kg current capacity, will remain as a base of operations for the Company on Vancouver Island with the Company’s focus being on increasing its capacity through an expansion plan at the nearby Chemainus Facility.
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