(Yicai Global) Dec. 18 -- A unit of China's ABA Chemicals and London-based drug developer Wundr will build a medical hemp extracting and processing plant in Malta that will develop and supply medical cannabis products to the European and other markets.

Malta-based Amino Chemicals and Wundr, which holds the distribution rights for medical cannabis in the European Union, will invest EUR6 million (USD6.7 million) to set up an equally owned joint venture, the Taicang, Jiangsu province-based company said in a statement yesterday.

The southern European island country of Malta last year legalized medical cannabis and has been making efforts to become a center of medical cannabis research and investment.

The factory will extract cannabidiol, a non-addictive compound found in the cannabis plant that may have therapeutic properties. It will be dedicated to the research and development of various innovative drugs with cannabinoids as the active ingredient, the statement said.

ABA Chemicals' shares [SHE:300261] closed 4 percent lower today at CNY4.55 (USD0.65), after gaining almost 14 percent in the first two trading days this week.

Construction of the factory should be completed in a year's time. Net profit from the first year of operations is expected to reach EUR12.5 million and this is forecast to double the following year, the company added.

Wundr, also known as Greenstar Global, owns Neuss-based Iuvo Therapeutics, a German firm that holds both medical cannabis import and narcotics distribution licenses in the EU.