South Australia's MedTEC Pharma is closing in on its first commercial harvest, a milestone that has taken the company five years to reach.
The company's cultivation site spans 10 hectares in the Riverland region, roughly 260km east of Adelaide, where around 12,000 plants are currently growing.
Harvesting is expected to begin within the next two weeks, with MedTEC targeting a mid-year release of its first Australian-grown flower and oil products. Distribution will be handled by Health House International.
Grown under protective netting enclosures, the crop is projected to produce around 8,000kg of dried flower. Most of the yield will be THC strains intended for inhalation and extraction, while approximately 1,000kg is designated for CBD-only oil.
Managing director and largest shareholder Brad Gallard said the road to this point has been anything but short.
"The company started in 2019 and, since I went to a cannabis conference early that year, it's been a full-time gig to get to this point," he said. "If anyone tells you they can do it quickly, don't believe them. We knew it was going to be a long slog, although probably not quite as long as [this]."
Gallard declined to reveal total costs, though he said the roughly 100-strong shareholder base has "great depth."
"We have smart-money shareholders who were chosen to invest in the business," Gallard said. "We have worked on a capital-light base for high-yielding production and have spent a lot less money than probably some of the listed companies.
"I've come from a horticultural background, from tomatoes to citrus, and if you don't run a lean operation, you're not going to make it. We've seen that already in the cannabis industry."
Though the company had previously flagged a potential public listing around 2023/24, Gallard has since ruled that out, citing a shift in the composition of its investors.
"When you start up and investors come on board, they want to know what the exit is, and directors at the time thought an IPO might be the way to go. But the shareholder base has changed since then and at this point in time, we have no intention of an IPO," he said.
"We are comfortably self-funded and unfortunately, IPOs in Australia, whether it be cannabis or anything else, have struggled."
Alongside the existing outdoor site — which will produce one crop per year — construction on a nearly 3,000sqm indoor facility is set to begin soon on the same 20-hectare property, enabling year-round production.
The indoor growing capacity is expected to be operational by the final quarter of 2024, with a GMP manufacturing facility also in the pipeline.
Chief commercial officer Dirk Beelen said the arrival of locally cultivated product will be a positive development for the Australian market and for patients.
"We will produce medicinal cannabis with provenance, that is one of our points of difference," he said. "I believe people want and like Australian products and there's not that many in the market. How much medicinal cannabis in Australia is imported, 75%? 80%?
"We are making sure we have the right products for this market and will focus on that provenance, making sure people understand that, here in Australia, we have the capacity to grow quality flower that is competitive with what is being imported, whether that is the cannabinoid content, terpene content or the physical appearance of the product."
Beelen pointed to the outdoor and organic nature of the cultivation, combined with iCloud and AI-based growing software, as factors that will support product quality.
"Some people say [outdoor-grown plants] might not be stable or consistent, but given the environment where we are growing, we truly believe the benefits will be clear.
"Those who have come through the facility have been blown away by the plants. Of course we need to get the results and the Certificate of Analysis (CoA), but we believe we have the right cannabinoids and the terpene content to deliver quality products."
Gallard noted that Riverland's climate is well suited to outdoor cannabis cultivation, offering hot days, minimal rainfall — automated irrigation has been installed across the growing enclosures — and consistent breezes that lower the risk of mould.
"We are also growing in living soil so we're fully organic," Gallard added.
MedTEC has established partnerships with several research institutions, including the South Australian Health and Medical Research Institute (SAHMRI), as part of a clinically oriented approach to cannabis medicine.
Beelen described the company as a "truly medicinal cannabis-focused company" that will collaborate with doctors and research bodies to pinpoint strains suited to specific medical indications.
While high-THC products will form part of the eventual offering, the more immediate launch of MedTEC-branded medicine — sourced from an undisclosed third-party cultivator — will feature lower THC levels.
"There is a strong indication that very high-THC flowers, the 35% flowers, are not what a typical patient is looking for," Beelen said. "Our products that will come out very soon, which are also from an Australian producer, sit at 14% to 18% THC.
"The products from our crop will sit around at 18% to 25% THC, and maybe higher. We'll have to see when the results come in."
Beyond cultivation, MedTEC's facility includes a drying room and offers propagation and cloning capabilities within fully insulated, temperature-controlled environments.
