The former Mataura paper mill, where the ouvea premix was stored, is being converted into a medical cannabis and hemp mill.
Southern Medicinal Limited, a partnership between Natural Horticulture Limited and Dunedin-based medical cannabis company SOMA Group, has begun converting the former mill buildings into a facility for growing, testing and processing medicinal cannabis and hemp free of THC.
Executive Director Greg Marshall said the project could create new processing and growing jobs to support up to 500 acres of cultivation in Southland over the next 10 years.
The initial equipping of 400 m2 of indoor cultivation space within the old mill complex was completed and the cultivation had started on site.
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John Hawkins / things
The former Mataura paper mill is converted into a medical cannabis and hemp mill
The expansion plans will increase the capacity of the facility to 2,000 m2, with 4,000 kg of medical cannabis flowers being produced and 500 tons of hemp flowers being processed per year.
The former paper mill held 10,000 tons of a dangerous substance ouvea premix which, once wet, is highly toxic and releases ammonia.
The premix will be moved to the New Zealand Aluminum Smelters Limited (NZAS) site at Tiwai Point, where it will be stored in containers.
“The New Zealand medical cannabis market is projected to be valued at at least $ 1.0 billion by 2025 and has significant export potential. The mill gives us several competitive advantages in the industry, from the size of its footprint to the location of the hydropower, “Marshall said.
“This will allow us to operate on a very cost-effective basis and address the serious processing and production bottlenecks that are likely to constrain the medical cannabis industry when production begins in full in the next two years,” said Marshall .
Southern Medicinal Limited’s business model includes a plan to partner with Southland farmers by jointly planting non-THC hemp on Southland farms.
Dominico Zapata / things
Medicinal cannabis plants grown in a high security facility. [File photo]
The harvested hemp is processed into CBD [cannabidiol] Products and low-emission pelleted stock feeds that studies show can reduce greenhouse gas emissions from cows by up to 20 percent, Marshall said.
Marshall said it worked with agribusiness science and technology consultancy AbacusBio to model the potential benefits of incorporating hemp into Southland farms.
Research has shown that hemp has the potential to become a valuable source of income and an environmental degradation.
“Farmers have seen benefits from lower nitrate levels in waterways, lower emissions, new sources of income and the ability to reduce stocking rates while preserving yields. The AbacusBio report suggests that growing hemp on dairy farms could improve profitability while improving environmental results.
“It is estimated that the Southland economy will face a $ 265 million bill to meet the new emissions and freshwater regulations by 2025 and we plan to be part of the solution,” Marshall said.
The former Mataura paper mill, where the ouvea premix was stored, was stored during the floods in February 2020.
Marshall said he developed Southern Medicinal’s business model after his experience in the North American market, where commercialization of the supply caused price volatility and made profitability for some early entrants difficult.
“Our business model is structured differently in order to achieve optimal economic, environmental and municipal results in a large part of Southland and to counteract the price fluctuations that often occur in newly deregulated markets and affect operators who focus more closely on one or two segments Value chain, ”says Marshall.
Affordable Therapeutics for New Zealanders Marshall says another driver of the business is bringing the safest, most affordable medical cannabis to the estimated 425,000 New Zealand consumers.
“The market is currently being supplied with imported products, most of which are of untested quality and effectiveness, as well as the unregulated local black market. Our approach puts safety, testing and knowledge first to create high quality strains, medicinal cannabis and services for an industry that can and must be based on trust. “
The Ministry of Health set up the Medical Cannabis Program to improve the quality of medical cannabis for patients.
However, Marshall said the current regulatory environment in New Zealand and its adequacy are challenging.
He was frustrated with the level of scientific research on cannabis overseas, but said that the great scientists in New Zealand and the level of research in the country represented a significant opportunity.
Marshall believed the cannabis industry could be a big sector and uplift communities with its economic ramifications, he said.