Australian dried fruit, nuts, seeds and rice producer Murray River Organics has announced that it has been granted the authority to grow cannabis.

The company said the approval, from Agriculture Victoria, to grow low-THC cannabis is a significant step and has the potential to deliver “a new vertical” to complement its dried vine fruit business.

The news comes just days after the company issued a new forecast for its underlying profitability, taking into account recent harvest delays.

In an announcement today (5 June) to the Australian Securities Exchange (ASX), on which it is listed, Murray River said it is confident that growing organic hemp will contribute to the growth of the organic foods industry in Australia.

“The Australian hemp market is in its infancy; the company now has the potential to be the first large-scale grower of organic hemp in Australia to meet the strong demand in global markets,” it said.

“The growing demand for organic hemp-based foods is an emerging trend in the food industry and we believe this offers a unique opportunity for MRG. The granting of the Authority gives MRG additional scope and options as we review our short- to medium-term plans for the first phase of Project Magnum [the development of its 2,300 hectare Nangiloc farm property in Victoria].”

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The company said development on the property will begin in fiscal year 2020 with the planting of high-demand annual crops.

“Hemp can now also be considered as part of this feasibility assessment,” it said.

Murray River chief executive officer Valentina Tripp said the potential of growing organic hemp on its farms aligned with the company’s strategy of producing highly nutritious, organic crops commanding premium prices.

“This also affords us the opportunity of establishing and developing another vertical integration of production through to retail-ready products, while building strategic partnerships with such products,” she said.

“We are confident that growing organic hemp will contribute to the growth of the organic foods industry in Australia. Low-THC cannabis can be used in a variety of food products including snacks and beverages, as well as supplements, and the potential for the agricultural sector in Australia to embrace crops such as organic hemp is exciting.”

On Monday (3 June), Murray River, which has consumer-facing brands including Gobble and Pacific Organics, said it had been hit by harvest delays and estimated it would make a loss at the level of EBITDA before SGARA of AUD3.7m (US$2.6m) to AUD4.2m in its financial year ending 30 June.

It had previously forecast a loss of AUD2.8m to AUD3.2m.