Cann Group, which operates two medicinal cannabis processing facilities in Melbourne said it had originally looked at a site at Tullamarine on Melbourne's outskirts, but the opportunity to lower electric heating costs due to the sunny and warm weather in the region was part of its decision to choose Mildura.
Earlier this week Cann Group announced it had entered a non-binding agreement with the Mildura Rural City Council over the purchase of a $10.75 million site in the municipality where the greenhouse will be built.
Eventually, Cann Group said it hoped it would be able to cultivate up to 50 tonnes of medical cannabis in dried flower form a year.
It is expected the facility will be completed by the end of 2020.
Cann chief executive Peter Crock said Mildura was a perfect fit for his company.
"The Mildura site offers important advantages, including a lower total build cost and lower ongoing operating costs, due to the dryer climate and higher sunlight hours resulting in reduced power use," Mr Crock said.