Tasmania is set to give the green light for Australia's first legal medical marijuana grower, in what is expected to be the start of a new industry for the state. Capital Mining, a failed explorer with a plan to transform itself as the second ASX-listed cannabis company, has struck a deal that puts it in line to be granted the first licence.

Capital Mining will come out of a trading halt on Friday morning to announce it has struck a deal to pay $250,000 in cash and $100,000 in shares for Cannabinoid Extracts Australia, a subsidiary of ASX-listed Atlas Pearls and Perfumes. The venture has an application with the Tasmanian Department of Health and Human Services for a licence to grow medical-grade cannabis for the purpose of extracting cannabidiol (CBD), one of 85 active cannabinoids found in the plant.

Cannabinoid Extracts Australia has an application with the Tasmanian Department of Health and Human Services for a licence to grow medical-grade cannabis for the purpose of extracting cannabidiol (CBD), one of 85 active cannabinoids found in the plant. Credit:MCT

The company hired Piper Alderman partner Teresa Nicoletti, a 20-year veteran of the big pharma industry, to lead the process of gaining regulatory approvals for the new venture ahead of expectations of a policy change that will for the first time make it possible to apply for a production licence in Australia.

Tasmanian Minister for Health Michael Ferguson told Fairfax Media that CBD is due to be classed as schedule 4 (prescription-only medicine) from June 1, 2015, and that there is currently only one application pending to grow and develop high-CBD hemp cultivars in the state.