Quarterly Update
Quarterly Update

Sydney, Oct 31, 2018 AEST (ABN Newswire) - The Hydroponics Company Limited, to be renamed THC Global Group Limited (subject to shareholder approval), (THC Global or the Company) (googlechartASX:THC) (googlechartHDRPF:OTCMKTS) is pleased to provide an update to the market of its activities for the quarter ended 30 September 2018 (the Quarter).

Australian Operating Licences

THC Global provides the following update on its domestic operating licences:

Cannabis Research Licence: THC Global holds a cannabis research licence over its Queensland R&D facility.

Medicinal Cannabis (Cultivation) Licences: THC Global holds a cultivation licence for its Queensland R&D facility. THC Global has prepared a second application for THC's Northern NSW growing site which is expected to be submitted in the coming weeks.

Manufacturing Licences: THC Global has two separate Manufacturing Licence applications over two locations, including the newly acquired Southern Queensland facility and the Queensland R&D facility, which both are under current active review.

Pharmaceutical Grade Production Capability - $35m replacement value

The acquisition of the industry leading, bio-pharmaceutical manufacturing facility in Southern Queensland (the Manufacturing Facility) has positioned THC Global to be able to support both the domestic and export markets. THC Global estimates Good Manufacturing Practice (GMP) production of 12,000 kg of cannabinoid annually amounting to 120,000 kg of oil. This capacity is unparalleled in the domestic market, and rivals some of the largest cannabis producers in the world. The ethanol/alcohol extraction process used by the Manufacturing Facility is far more effective in isolating cannabinoids and producing consistent pharma-grade product at large scale.

Further, the Manufacturing Facility has a complete on-site testing and product development laboratory designed for the validation of pharmaceutical products, testing, and research and development activities. As the Company expands its operations, direct ownership of a laboratory of this specification will play a strategic role within the Australian cannabis sector.

THC Global's intention with respect to GMP medicinal cannabis manufacture is to produce high-purity cannabidiol products with high value-add versus the production and export of dried flower.

During the Quarter, the Company had received assessment of the replacement value of the Manufacturing Facility of at least $35 million, representing a significant asset for the Company and a key step in furthering THC Global's vertically integrated 'Farm to Pharma' model.

Increased Medicinal Cannabis Growing Capacity

During the Quarter, the Company has expanded on its growing capacity, now spanning 64,000 sqm of land with an estimated 31,000 sqm of hydroponic greenhouse. THC Global expects yield from existing growing capacity to be in the order of over 50,000 kg of dried flower annually. THC Global will continue to build its plant material supply chain in support of building to full manufacturing capacity.

THC Global continues to investigate innovative agricultural methods to increase yield using hydroponic grow methods, including those sourced internationally.

Prescriber and Patient Engagement Strategy

As part of the Company's strategy for prescriber and patient engagement, THC Global sponsored a two-day educational event in early September held in Sydney. The course educated prescribers on the evidence supporting medicinal cannabis use in a clinical context and how to navigate the Australian regulatory framework to prescribe medicinal cannabis. THC Global is the exclusive distributor within Australia of Endoca CBD products, which were example products in the prescriber training. Building connections with patients and prescribers is a key pathway to domestic sales of medicinal cannabis products.

Medicinal Cannabis Team

During the Quarter, THC Global has focussed on increasing its internal capacity to conduct pharmaceutical grade quality assurance and regulatory affairs management, and is in final stages of securing new employees to complement the existing THC Global team. THC Global remains focussed on ensuring capacity to deliver the highest quality, fully compliant GMP product that is suitable for both the domestic and export markets.

Canadian Operations

THC Global's CEO has been in Canada during the Quarter to assist in positioning THC Global's hydroponics division, Crystal Mountain to take advantage of new micro-cultivators as legalisation of recreational cannabis in Canada expands and creates new markets.

The Company has also incorporated Vertical Canna Inc as a new Canadian subsidiary which will act as an investment vehicle for the acquisition of and participation in other cannabis ventures in the coming months.

About THC Global Group Limited

THC Global Group Limited (ASX:THC) (OTCMKTS:HDRPF) (FRA:9TH) operates under a 'Farm to Pharma' pharmaceutical model, now holding all three key cannabis licences being a Cannabis Research Licence, a Medicinal Cannabis Licence (Cultivation), and a Manufacture Licence through its domestic medicinal cannabis subsidiaries THC Pharma and Canndeo. THC Global has secured a significant cannabis growing capacity over multiple cultivation projects and owns a pharmaceuticals bio-manufacturing facility with attached testing and product development laboratory. THC Global is in prime position to commence medicinal cannabis production to service both domestic patients and the global export market. THC Global is active globally with operations in Australia, New Zealand, and Canada and partnerships across Europe, Asia, and the Middle East. In addition to its core Australian medicinal cannabis assets, THC Global has a significant Canadian presence – both in cannabis and in hydroponics equipment. THC Global's Canadian cannabis operation, Vertical Canna, holds property in Nova Scotia, Canada being developed into a large scale cannabis production site. THC Global's hydroponics equipment division, Crystal Mountain, is a revenue generating manufacturer, wholesaler, and retailer of hydroponic equipment and supplies.

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Contact

Henry Kinstlinger
Company Secretary
The Hydroponics Company Limited
P: +61-2-9251-7177
E: henry.kinstlinger@thcl.com.au

Michael Lovesey
Director Corporate Media Relations
MMR Corporate Services Pty Ltd
P: +61-2-9251-7177
M: +61-449-607-636
E: michaell@mmrcorporate.com



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