PUF Ventures plans to construct a one million sqf greenhouse operation, with large scale manufacturing, processing and office facilities for the cultivation, production and manufacture of medical cannabis and associated products in Australia. The construction of the facility will be completed in stages at an estimated total cost of C$50 million (A$51 million). The first phase of the project is to cover approximately 300,000 sqf, which upon completion will be the largest medical cannabis greenhouse in Australia.
The first crop, based on current construction timelines, permitting and various Australian approvals, is expected to be planted in the fourth quarter 2018. PUF will seek financing to cover the costs of the project from both local and international partners. At full scale, the new facility will have the capacity to support annual production of 100,000 kilograms of high quality cannabis which, based on the current market price for high quality medical cannabis in Australia of between C$227 and C$315 per ounce or C$8000 and C$11,000 per kilogram, equates to an associated annual revenue generation potential of between C$800 million and C$1.1 billion.
Our own internal calculations and analysis suggest these prices will hold or likely increase due the higher margin high quality medical grade cannabis grown. Total operating costs are estimated to be between 20-25 percent of revenue. PUF Ventures Australia (PVA) has agreed to a purchase option agreement with the Richmond Valley Council for a 27-hectare parcel of land near the town of Casino in northern New South Wales, Australia. This is a landmark agreement whereby the council will provide the land for five years at no cost, with an option for PVA to purchase the parcel on favourable terms after year five.
The cost of the parcel at year five will be based on the current value of the land (2017) and not the reassessed value at the future date. In addition, PVA will be entitled to credits for money spent on land infrastructure.