Special Report: The deal with THC Global (ASX:THC) is evidence of the demand for MGC products in the broader medicinal cannabis market.

Over the last 6 months, MGC Pharma (ASX:MXC) has established some good traction in the market with its core medicinal cannabis products, CannEpil and MXP100.

And as the market continues to grow, the company is building out new distribution pathways to complement its existing product offering.

In line with that strategy, the company had some positive news for the market this morning, announcing a supply agreement with the ASX-listed THC Global.

Under the terms of the 18-month deal, MGC will provide three new product formulations to THC in a white-label arrangement. The products will then be packaged and made available to patients under the umbrella of THC’s popular Canndeo brand.

For THC Global, the MGC products will be provide a high-quality supplement to its existing product range, helping to bolster sales as production ramps up from its Southport facility – the largest pharmaceutical grade cannabis extraction facility in the southern hemisphere.

And for Europe-based MGC Pharma there are myriad benefits, starting with the creation of an ideal pathway to drive distribution into the Australia and New Zealand market.

In addition, the deal is already revenue generative for MXC. The first purchase order totalling around €25,000 has been received, and under the terms of the binding agreement, subsequent purchase orders will be made for a minimum of €50,000.

For MGC co-founder Romy Zomer, the deal is a reflection of the high regard that MGC products are held within the industry.

“The white label production and supply of pharma grade Canndeo-branded products demonstrates MGC’s reputation, quality and cost competitiveness in the use of phytocannabinoids for medicinal purposes,” Zomer said.

He added that the deal provides an ideal platform to drive sales into international markets, as the company goes forward with developing its 15,000 sqm production facility in Malta.

The initial product range supplied by MGC will be comprised of three oral liquid formulations, comprised of high/low, balanced and low/high combinations of CBD and THC.

>> Now read: These 3 pot stocks could profit as regulatory roadblocks crumble in 2020

This story was developed in collaboration with MGC Pharmaceuticals Ltd, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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