Southeast Auckland has been chosen by New Zealand's first commercial cannabis company as the site for growing and turning the product into medicinal products.
Helius Therapeutics has just announced it has leased nearly 1ha of space in the industrial heartland of East Tamaki, saying it will create a "new state-of-the-art facility for medicinal cannabis cultivation, extraction, research and manufacturing operations".
No address has been given for the operations.
The business said it had secured a 8800sq m property for development.
JP Schmidt, Helius co-founder, said: "We're delighted to have secured this facility, which will set the standard for medicinal cannabis production in New Zealand. We're operating in one of the fastest-growing industries in the world and this property underscores our commitment to leading this market in New Zealand."
The site has 6500sq m of warehouse, which will be used for cultivation and about 2000sq m of offices and laboratories.
The agreement also allows Helius to option an additional 6500sq m in an adjacent tenancy.
"Using industry-leading cultivation stacking technology, this will provide Helius with around 20,000sq m of cultivation space, capable of growing 140,000 plants and producing 50 tones of cannabis material per annum," a Helius statement said.
The property has good fundamentals with location and access, and it has been upgraded to food-manufacturing-practice quality for producing and storing medical products, Helius said.
Agents CBRE did the deal and Schmidt says it was a far from an orthodox brief.
"We had very clear drivers from the outset. Helius required a secure indoor facility that would stand up to the rigours of GMP certification, yet still provide close proximity to law enforcement, transportation and distribution networks," Schmidt said.
Helius is a biotechnology company, cultivating cannabis initially for research purposes, and ultimately to produce world-class therapeutics from New Zealand, it said.
"This site allows for precision indoor cultivation, and provides complete control over our growing environment, which outdoor or greenhouse cultivation does not allow for. This, along with very high-level security, is what is required for medical-grade, integrated cannabis production," Schmidt said.
The company had always been clear about needing a controlled indoor, GMP-certified facility.
But finding a site at scale to cultivate and extract medicinal cannabis and accommodate research and manufacturing all in one integrated space was no mean feat, he said.
"Many of the industrial properties we considered tended to have large warehouses but minimal office and ancillary buildings. Another concern for us was ensuring there wasn't any existing contamination issues, as a lot of well-located buildings with suitable office-to-warehouse ratios were often built using asbestos, which ruled out a lot of options for us. It's a credit to the team at CBRE we were able to find the right site for our needs," he said.
Claus Brewer, CBRE's national industrial and logistics director, expressed delight at the deal.
"We're already seeing in places like Colorado and California the impact legal cannabis-manufacturing plants have had on the industrial property market and this latest deal highlights just how prevalent medicinal cannabis and biotech industries could be in the tightly held market here in the future," Brewer said.
"Whether it's plant-based meat or more generic growing or processing facilities, essentially the re-purposing of industrial stock with low stud height or excess office space to indoor horticulture space could be the future of farming in urban environments providing further opportunities for savvy landlords," Brewer said.
Schmidt said a law change was due next year and Helius was looking forward to getting its facility up and running soon, with the aim to sell domestically and internationally by mid-2020.