Special Report: Sophisticated and professional investors have given ECS Botanics (ASX:ECS) $4 million in a share placement, funds the company will use to complete its medicinal cannabis project in Tasmania.

Construction of the landmark outdoor medicinal cannabis facility is at an “advanced stage”, and the money from the share placement will allow ECS to purchase equipment for extracting cannabis resin at the facility, as well as cannabis dryers and other ancillary items.

The coming grow season will be used to conduct a “pilot grow” and processing run as the facility is completed, before ECS embarks on a major commercial grow next season at a larger scale than first planned.

The company has a vision of becoming the largest and most diversified cannabis company in Australia.

The three-stage expansion project that could make Tasmania and ECS Botanics a world leader in medicinal cannabis cultivation and post-harvest production.

The cannabis will be processed on-site with a facility that would dry the biomass, then separate the leaf and bud from the stem (bucking), then mill it into smaller pieces; then extract the CBD and THC as a whole plant extract resin containing full-spectrum cannabinoids for sale to off-takers.

Adding experienced new leadership

ECS says it is also searching for a key executive to lead ECS’s hemp wellness and hemp CBD products. The company recently lured Damian Wood away from Little Green Pharma (ASX:LGP), where he had served as head of production.

“ECS is well-capitalised to bring its medicinal cannabis project to life, while also being able to invest in lucrative and high growth hemp opportunities,” says ECS Botanics managing director Alex Keach.

“Recent decisions by the UN to reclassify cannabis, as well as the Office of Drug Control’s guidance for low-THC hemp, bode extremely well for the ECS business and its potential to grow into a bigger market at a lower cost of production.

Yesterday’s surprise final decision by the TGA to increase the daily limit of CBD to 150mg, is 2.5 greater than the interim decision of 60mg per day.

“This is a step-change for future CBD demand in Australia and bodes extremely well for the ECS business model”

“We expect the industry will continue to deregulate on a global and local level and continue to position ourselves well for the changes we are anticipating.

“We’d like to thank both new and existing shareholders for their support.”

The company also expects to sign offtake agreements soon and is looking to develop a market for secondary materials such as terpenes, waxes, hurd and fibre.

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.