ASX cannabis stock Primary Hemp's plant-based milk will be sold in Coles

Australian Primary Hemp (ASX:APH) advised that it has bagged a significant deal – securing a retail distribution agreement to sell its plant-based milk in retail giant, Coles Supermarkets (ASX:COL).

The deal will see APH’s new Mt Elephant ‘mylk’ branded hemp and oat milk to be sold in 140 Coles stores in New South Wales, Victoria, ACT and Queensland from April 2021.

The company expects to generate approximately $200,000 of revenue per annum from this arrangement.

Coles will carry two Mt Elephant drinks – the original oat and hemp mylk, and the chocolate oat and hemp mylk. The original version was previously trialled with a number of Melbourne-based baristas to develop texture and flavour.

APH said Mt. Elephant mylk is low in saturated fats, free from cholesterol, and is 100% vegan.

Growing demand for plant-based milk

Demand for plant-based milk market is being driven by consumers seeking innovative and nutritious alternatives to dairy milk other than soy or almond milk.

According to Global Market Insights, the global plant-based milk market is expected to be worth US $21 billion by 2026.

Although hemp is typically considered another part of the ASX cannabis sector, hemp milk in particular is forging its own way in the superfood category.

To meet the growing demand, the company has recently been ramping up its retail distribution channels.

Earlier last month, the company struck a second distribution deal with Woolworths(ASX:WOW), stocking its Mt Elephant ‘mylk’ and oat milks at 165 Woolworths stores across Australia.

That deal followed another similar agreement made with 7-Eleven stores in November 2020, which saw three flavours of Mt Elephant snack bars sold in 720 7-Eleven stores across the country. The company expects that deal to generate around $1 million to $1.4 million in annual revenues.

The growing business has prompted the company to raise $5.2 million back in January.

For the half year ended 31 December 2020, APH reported a 51.8% increase in revenues to $0.74 million – but ended up with a bottom line loss of $1.05 million, which was still an improvement from the $4.85 million loss on pcp.

The company’s share price has been rising by almost 300% in the last 12 months, as moves to decriminalise cannabis are gaining ground around the world.