A Chinese-owned company has taken near-full control of Pontville medicinal cannabis grower Tasmanian Botanics after buying out the business’s founding family for $31 million.
Yongji Health, a subsidiary of Shanghai Stock Exchange-listed Guizhou Yongji Printing, bought the Fehlberg family’s 52.69% stake in Tasmanian Botanics’ holding company, Pijen.
Pijen owns 96.49% of Tasmanian Botanics, taking Yongji’s indirect stake in the grower from 45.64% to 96.49%.
Guizhou Yongji Printing’s main business is printing cigarette packaging.
Rodney and Tony Fehlberg will each receive about $13.77 million from the sale and Marlene Fehlberg about $3.47 million, according to the company’s filing.
The price is being paid in three instalments, with Pijen and Tasmanian Botanics guaranteeing the final two payments, worth about $12.4 million.
Yongji’s board approved the deal in October last year and the agreement was signed in December. It was completed this month.
Yongji also owns medicinal cannabis importer Phytoca, which it bought in a separate $62 million deal.
Tasmanian Botanics chief executive Craig Knight told ABC Radio Hobart that Yongji had been a major shareholder since about 2019.
“In a lot of ways it doesn’t mean an enormous amount for us on site,” he said.
Knight said the jobs of the site’s staff were secure and no staff would be brought in from elsewhere to manage the business.
“They want the company as it is, if not bigger than it is,” he said.
“There are no issues around job security or change to operations or anything along those lines.”
He acknowledged foreign ownership “sounds ominous in some ways”.
“I can understand that there’s a world where we would like to think everything that’s in Tasmania is owned by Tasmanians, but we’re part of a bigger landscape, a bigger world,” he said.
Knight described the takeover as a vote of confidence in the business.
“People don’t invest this type of money in something that they don’t have confidence in,” he said.
He said the business was now looking at options to expand as part of a larger company with other medicinal cannabis assets in Australia.
He said about two-thirds of medicinal cannabis products in Australia were imported, with growing competition from Thailand.
“So challenges, but you know, we’re up for it,” he said.
Knight said Tasmanian Botanics was Australia’s largest medicinal cannabis cultivator, running a greenhouse with weekly harvests and a 2.5-hectare outdoor crop.
