Cann Group (ASX:CAN) has signed a $100 million heads of agreement that secures the site for Australia's largest medicinal cannabis manufacturing facility.
The agreement will see Australia Pacific Airports Melbourne (APAM) fund and undertake the primary build of the 37,000 square metre facility.
Upon completion of the construction, Cann will be required to complete the fit-out and technology deployment required at the facility. According to Cann, it is estimated the around $100 million investment will ultimately result in the employment of 170 people.
Cann successfully completed a capital raising late last year and will use a combination of debt and equity to fund the new project.
The five hectare site allows for a substantially larger facility than previously proposed by Cann. It is part of the 2,500 hectares of land available within the Melbourne Airport precinct.
Cann Group CEO Peter Crock said the support of APAM puts Cann in a strong position as it embarks upon its Stage 3 expansion.
“This site is ideally suited to our needs and the heads of agreement represents an important step that allows us to proceed with final design," said Mr Crock
“APAM’s contribution to the construction of these facilities will enable Cann to invest additional capital in increased cultivation capacity; expanded development and production capabilities, while also allowing for further future expansion.”
He said APAM has an excellent track record of delivering large development projects on time.
“As per our ongoing strategy, the facility provides Cann with the necessary scale to compete on the global stage in the medicinal cannabis sector,” he added.
According to APAM’s chief of property Linc Horton, “Cann’s decision to locate its new facilities within the Melbourne Airport precinct is consistent with our strategy to attract high quality tenants that not only contribute to the long term objectives of the business, but seek to connect Victoria’s technology industry to the rest of the world.”