You might be interested in
News
Top 10 at 11: Solid drilling results and a massive dope deal have tongues wagging today
News
Banking on pot: Minus one global investment house, Switzerland moves to legalise cannabis
News
News
On Tuesday, northern Victorian quiet achiever – the medicinal cannabis cultivator and manufacturer ECS Botanics (ASX:ECS) – revealed it secured a stunning five-year, $24 million deal to supply Perth-based MediCann Health with its top (medicinal cannabis dried flower) strain.
The deal builds on the existing two-year contract and expects to deliver over four tonnes of dried cannabis flower over five years. The highlights:
Both ECS and MediCann expect the volumes ordered under the Offtake Agreement to exceed the minimum annual volumes.
Overnight, Stockhead was delighted to speak with Nan-Maree Schoerie, managing director at ECS Botanics.
Nan-Maree: The offtake agreement with MediCann Health is really a momentous milestone for ECS Botanics.
This agreement not only reinforces our dedication to meeting the growing demand for affordable, accessible, and effective medicinal cannabis products but also amplifies ECS’ market presence and financial outlook. And the fact that Medicann are an existing client – that makes it even more rewarding – because based on their previous experience with us and the quality of our work, they’ve sought to secure ECS product for the next five years. And that feels pretty great.
Also, let me say contracts such as this one and the $10.2 million three-year agreement with Entoura announced just a few months ago are a testament to the company’s position as a leading provider of pharmaceutical-grade cannabis dried flower and will be transformative for ECS’s business operations as we continue to expand our GMP pharmaceutical grade facility to cultivate and manufacture cannabinoid medicines.
Nan-Maree: We are not aware of any other Australian offtake agreements of this magnitude, even though the cannabis industry in Australia is growing very rapidly.
This deal highlights the transformational time in the industry where retailers are gaining confidence in their future and the growth and maturity of the industry.
It also cements ECS Botanics’ position as a leading player in this high growth sector and MediCann’s confidence in growing consumer demand for affordable, accessible, and effective medicinal cannabis products.
Nan-Maree: A deal of this magnitude has far-reaching implications for the local industry as it signifies the growing demand and potential for medicinal cannabis in Australia and internationally.
We have secured $45.8m in large offtake agreements since December, each larger than the one before, and we expect to see more of these strategic partnerships and deals from the industry in the future, reflecting the maturation of the medical cannabis sector.
I reckon the Medicann agreement sets a promising precedent for the industry’s continued growth and development. And we’re really pleased to be out front representing.
Nan-Maree: We recognise the substantial supply requirements stipulated in the agreement with MediCann Health as a critical aspect of our commitment to the partnership.
Our philosophy has always been to grow with the market and we have already invested in expanding our facilities and will be leveraging the recent capacity and production enhancements, including the implementation of additional protective cropping enclosures, expanding the growing season and increasing outdoor grow areas, aligning our production capabilities with the growing demand articulated in the agreement.
So our approach to scaling production is underpinned by rigorous quality control measures and adherence to Good Manufacturing Practices (GMP) to ensure that every batch of ECS cannabis dried flower meets what are of course very stringent pharmaceutical-grade standards as expected by MediCann as well as the broader medicinal cannabis market.
Ultimately, the way we go about our business is simple – ECS Botanics is absolutely dedicated to fulfilling our obligations under the agreement – while upholding the highest standards of quality, consistency, and reliability in the delivery of medicinal cannabis products.
And most importantly we also remain just as committed to the ongoing research and development initiatives we have on the go. They’re aimed at optimising cultivation techniques, refining strains, and enhancing overall efficiency.
We’re actively exploring opportunities for further capacity enhancements, which may involve expanding our cultivation footprint or deploying advanced cultivation technologies.