TORONTO (Reuters) - Canada’s biggest licensed producer of medical marijuana has bought land next to its greenhouse production site that will allow it to more than double the total volume of cannabis it can grow, its chief executive said on Thursday.

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Canopy Growth Corp's WEED.TO Tweed Farms Inc subsidiary expects to spend at least C$25 million ($21 million) to upgrade the property, a flower farm it purchased for about C$9 million in cash and equity, with work including the installation of security cameras and fences due to start in October.

With Canada less than a year away from the planned legalization of marijuana for recreational use, licensed producers are rushing to try to fill an expected shortfall in supply.

“This is a very big leap, in terms of our output, our capacity, our footprint,” Bruce Linton, Canopy Growth’s CEO, said in an interview.

Canopy Growth is currently licensed to produce 31,000 kilograms of marijuana and related products, and aims to triple that by July next year, the deadline the federal government has given provinces to make pot legal for all.

The deal gives Canopy 450,000 square feet of greenhouses that can be immediately added to its existing 350,000 square foot facility in Niagara-on-the-Lake, Ontario. It is also building an additional 200,000 square feet of greenhouse capacity on its existing property.

Linton said that a 250,000 square foot greenhouse should be able to produce around 10,000 kilograms of marijuana annually, which at an average sale price of C$8 a gram could bring in C$80 million.

Beyond Niagara, the company is expanding its headquarters in a former Hershey’s chocolate factory in Smiths Falls, Ontario, and developing other indoor properties in New Brunswick, Saskatchewan, and Alberta.

The company has signed up about a third of the roughly 200,000 medical marijuana customers in Canada, and Linton said he expected some 3 million Canadians to use legal non-medical pot next year.

Within three years he expected more than half the company’s revenues to come from business outside Canada, as countries from Australia to Germany take Canada’s lead in creating rules to regulate the industry.

Canopy Growth has been exporting cannabis for sale in German pharmacies for more than a year, has a majority stake in a medical marijuana company seeking final licensing in Chile and a 10 percent stake in Australian company AusCann AC8.AX. It has also partnered with two emerging medical marijuana companies in Brazil.

The company has so far steered clear of the U.S. market, citing the legal uncertainty of federal prohibition that overhangs legality in several states.

($1 = 1.2140 Canadian dollars)