The 11,000-square metre project will be the biggest indoor cannabis-growing site in Australia, with thousands of marijuana plants to be grown there at a time.

The company behind the project, Canngea, aims to "bridge the gap between ancient and contemporary medicine for better quality of life for patients".

"This will be a massive project for the Hunter Valley," Canngea director Nial Wheate said.

Construction will begin next year, with operations to begin in early 2021.

Dr Wheate, who is also an associate professor and pharmaceutical researcher at the University of Sydney, said humans had been "using cannabis for thousands of years".

"What we're doing now is providing the best products for the right diseases, with medicine based on evidence and clinical trials," he said.

The federal government has licenced about 80 Australian companies to grow and harvest medicinal cannabis since 2016, when it changed the law to enable the plant to be cultivated for medical and research purposes.

More than 11,000 patients have been approved to use medicinal cannabis products in Australia, with most of those approved this year.

This has been for conditions like chemotherapy-induced nausea and vomiting, refractory paediatric epilepsy, palliative care, cancer pain, neuropathic pain, spasticity from neurological conditions and anorexia.

Advocates are pushing for medicinal cannabis to become widely available for conditions like chronic pain, irritable bowel syndrome, anxiety, depression, glaucoma, Crohn's, colitis, loss of appetite, insomnia, fibromyalgia and arthritis.

Dr Wheate said medicinal cannabis had "lots of potential".

It had scope to provide many benefits in society and replace "a lot of drugs that aren't very effective and have very bad side effects".

"The perfect example here would be opioid painkillers, which are becoming a massive problem in Australia. Cannabis would be a much safer solution to that."

The company will follow clinical trials to determine what type of cannabis to grow for specific illnesses.

This will inform the levels of cannabidiol (a non-psychoactive part of the cannabis plant known as CBD) and the psychoactive tetrahydrocannabinol (known as THC) to be included in particular products.

Advocates are also pushing for the price of medicinal cannabis to fall significantly.

"Our facility is being set up so we can produce this at the lowest possible cost," Dr Wheate said. Canngea would make "pharmaceutical grade" products, he said.

"We're going to meet the TGA [Therapeutic Goods Administration] requirements for the control of chemicals in medicinal cannabis.

"Medicinal cannabis is a bit like wine. You have good and bad vintages. That comes down to sunlight, rain and nutrients."

Cannabis grown outdoors in dirt and under sunlight could produce "good and bad crops", he said.

"With our indoor facility, we can control every environmental parameter. We'll make the perfect on-spec product every single time."

Dr Wheate said the operation would be "environmentally friendly".

"We won't draw any electricity from the grid. We'll be completely solar-powered."

Canngea chief commercial officer Martin Bryden said the solar-powered battery would be "the largest privately-owned commercial battery in NSW".

"This coupled with our water-recycling technology will significantly reduce operation costs and allow us to re-sell solar power back to the grid for further revenue generation," Mr Bryden said.

Canngea will supply medicinal cannabis to other companies that want to sell to domestic and international consumers.

Its operation will involve growing, harvesting, extracting, packaging, labelling and distributing branded products.

It will also have a laboratory capable of "supercritical extraction, tissue culture and formulation for cannabis products".

Mr Bryden said the facility would help solve the problem of low quality and inconsistent cannabis products.

He said the increasing number of countries legalising medical cannabis meant "a huge shortage has emerged".

Canngea would offer products at a "much lower cost per unit than the average price in the US market".