The developer of a medicinal cannabis factory hopes a quiet corner of country Victoria will become a hub for cannabis farmers.

MediPharm Labs Australia is building a manufacturing site and warehouse in Wonthaggi, south-east of Melbourne, to import and process medicinal cannabis products, including cannabis oil.

The company, a subsidiary of Canadian firm MediPharm Labs, plans to start importing cannabis oil from October, and begin manufacturing early next year.

MediPharm Labs Australia managing director Warren Everitt said ultimately the plan was to process up to 100,000 kilograms of locally grown cannabis annually.

"In the next three to four months we will have our [Federal Government] import and manufacturing licence approved," Mr Everitt said.

He said the region had the potential to become a cannabis farming hotspot.

"You look at the challenges faced by dairy farmers in terms of making ends meet," Mr Everitt said.

"It really is a great opportunity from our perspective for farmers who have land and expertise around agriculture to look at cannabis as an alternative to their farming initiatives."

MediPharm Labs Australia managing director Warren Everitt is behind plans to build a medicinal cannabis processing plant in Wonthaggi, south-east of Melbourne. ( ABC Gippsland: Robert French )

To begin with, MediPharm Labs will rely on cannabis grown in other states.

"Transporting such a high volume of cannabis in Australia for long distances is prohibitive, in terms of the effort and security involved," Mr Everitt said.

"We've got really strong supply agreements and partnership companies in Canada — the biggest cultivators on the planet today exist in Canada — they're all very interested in looking at Australia as their next frontier for global expansion.

"Fifty-eight per cent of the world's opiates come from Australia … so we have a strong presence of drug production in Australia."

Cannabis industry a 'win win', Premier says

Victoria's Premier Daniel Andrews said there was a real opportunity for the development of the industry in the state.

"We indicated we would decriminalise, we would make legal, the use of medicinal cannabis in Victoria for certain patients for whom it can be life saving," he said.

"We did it principally as a health care policy, but beyond that there are some significant job opportunities and industry.

"There are real prospects for this industry to grow and thrive and to ultimately employ many, many Victorians.

"There are different parts of this industry, whether it's cultivating or growing these particular plants or turning them into the oils and other products that can be life saving.

"We've seen very exciting announcements from some very big multinational companies who are making Victoria their base for medicinal cannabis production and medicinal cannabis growing.

"This is a win win for everybody."