Shares in ECS Botanics jump on the back of landmark TGA announcement
Health & Biotech
Health & Biotech
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Special Report: ECS Botanics shares outperformed the market in the wake of Wednesday’s ruling.
Australia’s cannabis sector was watching closely Wednesday, as the Therapeutic Goods Administration (TGA) prepared to announce its interim decision on the domestic sale low-dose CBD products.
The afternoon announcement confirmed the framework outlined by the TGA in April, paving the way of the legal sale of registered CBD products over the counter (in place of prescription sales).
A number of ASX-listed cannabis stocks rose in the wake of the announcement, and Tasmania-based ECS Botanics (ASX:ECS) was among the leaders with a gain of around 20 per cent, before closing up 10%
Commenting on the announcement, ECS said legalisation of over the counter sale will materially increase the size of the market and demand for high CBD dry flower from its large-scale outdoor medicinal cannabis project in Tasmania, which is currently under construction.
ECS said the outdoor grow is a first among ASX listed companies and has a “CBD focus”
Along with the large-scale production of CBD, the company has an existing farming and processing business, also selling wholesale bulk hemp food ingredients and retail products, with oil and soups stocked in Woolies nationally.
ECS is also planning to build market shares by innovating in the hemp space looking to leverage the opportunity of hemp protein as an optimal, functional and high value plant protein source – taking advantage of the market-leading growing conditions that exist in the natural Tasmanian environment.
The TGA will now conduct a second consultation period until October 13, with a final ruling scheduled for February 1, 2021.
With regulatory tailwinds now in play, ECS said it’s now in position to “leverage our plant-based business for medicinal cannabis and food products, capturing the extraordinary and unique properties of industrial hemp & cannabis.”
Following the final TGA ruling next February, CBD products are expected to enter the over-the-counter market in late 2021.
Research from Freshleaf Analytics shows CBD products currently make up around 40 per cent of all cannabis prescriptions in the Australian market.
The consulting firm said that once legalised, over-the-counter CBD sales are expected to generate around $200m in annual revenues.
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.