The Althea Group Holdings Ltd (ASX: AGH) share price could charge higher this morning after the medicinal cannabis company released a positive announcement.
What was announced?
This morning Althea announced that Agriculture Victoria has granted its wholly owned subsidiary, Althea Company, an Authority for Low-THC Cannabis (Hemp Cultivation Licence) for commercial purposes relating to non-therapeutic use.
In addition to this, the company revealed that it has entered into an exclusive agreement with Australia's leading tissue culture laboratory, Tissue Culture Australia, which will see the two parties working together to develop proprietary tissue culture protocols for cannabis plants.
The release explains that tissue culture has many advantages over traditional cannabis propagation in terms of yield size, disease resistance, and superior control over genetics. In light of this, it is rapidly becoming the preferred method for large-scale cannabis producers.
Althea's director of cultivation, Daniel Mansfield, appeared to be pleased with the development and believes it has put it in a stronger position.
He said: "Being granted the Hemp Cultivation Licence allows us to obtain hands-on production experience with cannabis plants in a tissue culture laboratory environment, immediately."
He added: "We envisage our own cultivation capabilities being up to 10% more productive utilizing tissue culture techniques, as it will allow us to remove the traditional mother stock and propagation areas from our forthcoming production facility which increases our flowering capacity. Being able to familiarise ourselves with the tissue culture processes now puts us in a stronger position for when our Victorian facility is commissioned in 2020."
This sentiment was echoed by the company's CEO, Joshua Fegan, who believes Althea can fill a gap in the market.
He said: "The uptake of non-therapeutic CBD products has been strong in Europe and the USA and consumers are beginning to ask questions about the source of the active ingredients going into these products. There is certainly a gap in the market for a supplier of high quality, pathogen free hemp plants derived from tissue culture."
Elsewhere in the industry, on Tuesday the MGC Pharmaceuticals Ltd (ASX: MXC) share price pushed higher after confirming material revenue generation for the June quarter from its non-pharmaceutical business units.
