One of Australia’s leading listed cannabis companies is on track with its ‘farm to pharma’ business model after crossing a key regulatory hurdle.

Shares in THC Global (ASX: THC) rose 12.5 per cent this morning to $0.50 after the company announced its subsidiary Canndeo was granted a manufacture licence from the Australian Office of Drug Control.

The licence will allow the group to produce extracts and tinctures of cannabis and cannabis resin, and follows hot on the heels of an export licence approval from the same office.

The company is already cultivating medicinal cannabis at its strain R&D and manufacturing facility in Bundaberg, Queensland, which is operated by Canndeo.

Canndeo will now be able to apply for a permit to allow its own plant material to be used in the newly licensed facility.

Chairman Steven Xu welcomed the approval as the group prepares to start delivering Australian grown and manufactured medicinal cannabis products to domestic patients and overseas markets.

“The licence is a significant milestone for the Company, with the next targets being the development of a new generation of proprietary medicinal cannabis products and securing our revenue outlook through off-take agreements and furthering our existing global partnerships,” says Xu.

THC Global says it remains on target to be undertaking product validation production towards the fourth quarter of FY19.