PLANT COMPANY LOOKS TO GROW

Prairie Plant Systems expanding operations after $17M contract

The celebration over a new contract with Health Canada worth nearly
$17 million didn't last long at Prairie Plant Systems Inc. (PPS) last
week.

Now, the Saskatoon company -- the only federally licensed medical
marijuana producer in Canada -- must get to work hiring new staff and
expanding its secret growing facility to accommodate the contract.

It's a project the biotechnology company is happy to have, the
company's president and CEO Brent Zettl said Wednesday.

"We envision this as just a continuation of our business plan along
with becoming a manufacturer of pharmaceuticals using plants," Zettl
said.

In addition to its CanniMed medical marijuana business, which drives
between 60 and 65 per cent of its revenue, the company is working
toward developing therapeutic enzymes using plants.

PPS also has a bio products division, which sells fruit plants and
seed potatoes to farmers, and an environmental division, which helps
mining companies reclaim worksites.

The new contract with Health Canada, which started earlier this month
and runs through 2014, will see the company hire about 15 more staff
members and double its CanniMed capacity, Zettl said. Under federal
regulations, the CEO is unable to disclose the current capacity of the
business or its location.

Zettl did say, however, the product is grown using a peat moss-based
soil mix and an innovative irrigation system. No chemicals are used
during the process.

The company was awarded the contract after responding to a request for
proposals set out by the federal body in April 2009. PPS provides
cannabis to patients authorized by Health Canada.

"It basically was a request to make sure there was a sufficient supply
for the Canadians that are licensable and are requiring access to the
federal source," Zettl said. Running parallel to the new contract is a
second, older contract that expires in October 2011, he added.

PPS was awarded the new contract after its proposal was chosen by a
committee of experts, Health Canada spokesperson Gary Holub said in a
statement to The StarPhoenix. The contract, he said, encompasses
development, production and distribution of dried marijuana and
marijuana seeds.

"This contract will allow the government of Canada to continue to
provide reasonable access to a legal source of dried marijuana for
medical purposes while the government of Canada currently considers
longer-term options for reform of the Marijuana Medical Access
Program," Holub wrote.

He said the review of the program is focusing on three objectives:
Public health, safety and security; reasonable access to marijuana for
medical purposes; and examining overall costs to the government.

Meanwhile, after receiving feedback from patients who feel the single
strain of cannabis grown by PPS doesn't work for everyone, the company
plans to suggest to Health Canada it approve another strain of
marijuana for medical use, Zettl said.

"From our standpoint what we hope is that they consider having other
strains," he said.

"We see the value that that could bring to the patient
population."

The company employs about 50 people.