Canngea attracted to ECS Botanics’ sustainably grown cannabis, inks deal
Health & Biotech
Health & Biotech
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The company flagged additional revenue opportunities in the year ahead as it establishes traction as the leading B2B supplier in the Australian cannabis market.
Leading medicinal cannabis company ECS Botanics (ASX:ECS) continues to execute on a rapid growth trajectory, as it gains traction as the supplier of choice for a suite of domestic and international clients.
And today the company announced its latest supply agreement, striking a deal with Australian cannabis company Canngea.
Under the terms of the deal, ECS will supply Canngea with dry flower and oils from its market-leading production facilities, which are all GMP (Good Manufacturing Practice) compliant and manufactured to the highest industry standards.
The agreement will generate minimum revenues of $410,000 per year for ECS, and marks the latest in a long line of new revenue-generative supply deals underpinning the company’s strong top-line growth.
ECS expects the first dispatch of product to take place in October this year, the company said.
The deal with Canngea is further evidence of ECS’ ability to build market share as a leading B2B supplier of premium cannabis products.
In a recent interview with Stockhead, ECS managing director Alex Keach highlighted that the strategy presents ECS with an expanded addressable market, while also reducing operational risks.
Commenting on the deal, Canngea CEO Ryan Ballantyne said the company was also attracted to the deal by ECS’ industry-standard manufacturing practices and its commitment to semi-protected and outdoor growing facilities.
“We were drawn to this opportunity particularly because ECS shares our values and vision around sustainability throughout the supply-chain, which is something we are passionate about,” Ballantyne said.
The agreement is also “key to enhancing local supply capabilities for our clients in Australia and internationally”, he added.
Keach said ECS looks forward to updating the market with additional revenue contracts in the year ahead, as Australian companies increasingly look to source cannabis from local suppliers rather than overseas.
With its market-ready manufacturing facilities, ECS is in a prime position to meet that demand as a leading and trusted brand in the Australian cannabis industry.
“ECS continues to build a strong sales pipeline and as a result, it will aim to significantly increase the scale of cannabis production this coming season,” the company said.
“Further additional contracts are in final stages and ECS will update the market accordingly as these materialise.”
This article was developed in collaboration with ECS Botanics, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.