Chinese-Owned Firm Takes Over Cann Group's Mildura Cannabis Farm

Transaction Structure and Regulatory Approval

The acquisition cleared Australia's Foreign Investment Review Board (FIRB) without conditions. That's a signal the transaction met national-interest thresholds despite the buyer's Chinese ownership. On a strict reading of FIRB's published guidance, agricultural assets exceeding AUD 15 million in value trigger mandatory review when the acquirer is a foreign government investor or state-owned enterprise. The absence of conditions suggests the buyer is a private entity or the facility's valuation fell below sensitive-sector thresholds.

Cann Group disclosed the transaction in a September 28 ASX notice but didn't name the acquiring party. The company stated it will retain a minority equity stake and continue to supply certain genetics and intellectual property under a licensing arrangement. No purchase price was disclosed.

Mildura Facility Profile and Production Capacity

The Mildura site is licensed by Australia's Office of Drug Control (ODC) to cultivate and manufacture medicinal cannabis under the Narcotic Drugs Act 1967. The facility comprises 5.2 hectares of climate-controlled indoor grow space, making it one of the three largest licensed cultivation sites in Australia by canopy area. Cann Group has operated the site since 2018, producing dried flower and oil products for the domestic Special Access Scheme (SAS) market.

ODC licensing data shows the facility held a Manufacturing Licence and a Cultivation Licence as of June 2026. Both licenses permit production of cannabis for medicinal and scientific purposes but prohibit recreational or export sales without additional permits. The acquiring firm must apply to ODC for a license transfer or operate under Cann Group's existing licenses during a transition period, per standard ODC procedure.

Foreign Ownership Precedent in Australian Cannabis

This is the second major Chinese acquisition of Australian cannabis assets since 2024, when Chongqing Pharmaceutical Group acquired a 19.9% stake in Little Green Pharma. That transaction also cleared FIRB review. The Mildura takeover, however, is the first instance of operational control passing to a foreign entity rather than a passive equity investment.

Australia's medicinal cannabis framework doesn't restrict foreign ownership of licensed cultivators. But ODC requires all license holders to demonstrate "fit and proper person" criteria, including financial probity and compliance history. The acquiring firm will need to satisfy those criteria in any license-transfer application. FIRB's approval addresses national-security and competition concerns but doesn't substitute for ODC's licensing authority.

Market Implications and Domestic Supply

Cann Group's exit from direct cultivation follows two years of negative operating cash flow and a 34% decline in domestic cannabis sales revenue in FY 2025. The company reported AUD 8.2 million in cultivation losses in its August 2026 annual report, citing oversupply in the SAS market and price compression from imports. The sale allows Cann Group to reduce fixed costs while retaining revenue from IP licensing and genetics supply.

For the Australian market, the transaction consolidates production capacity under fewer operators. Three firms—Cannatrek, Little Green Pharma, and now the unnamed Chinese acquirer—control approximately 60% of Australia's licensed indoor cultivation canopy. That concentration could stabilize pricing if the acquirer reduces output. Or it could increase import dependency if the firm prioritizes export markets over domestic SAS supply. The next quarterly ODC data release, due December 2026, will show whether the Mildura facility's production volumes change post-acquisition.

For background on Australia's evolving cannabis regulatory landscape, see the CannIntel topic hub on the Australia cannabis industry.