ECS Botanics Holdings Ltd (ASX: ECS) has secured a four year agreement with MW Pharma Limited, one of New Zealand’s largest cannabis distribution companies, for the supply of ECS’ medicinal cannabis products.
Managing Director, Alex Keach, said the agreement will generate a minimum of $1.75m in revenue and adds to the company’s growing revenue profile.
We are very excited to partner with MW Pharma Limited, an innovative group with significant reach across New Zealand,” Mr Keach said.
“There is strong underlying demand for medicinal cannabis across the country and a favourable competitive landscape for our product suite, so we anticipate our high quality products will be well received. Discussions regarding additional opportunities are ongoing and we look forward to building on this valuable relationship.”
Under the agreement and through ECS’ Murray Meds licence, the company will supply a minimum of $1.75m in GMP manufactured medicinal cannabis products which will be white labelled across existing brands and sold through MW Pharma’s established relationships with New Zealand’s pharmacy networks.
In the first year, the minimum order value will be $250,000, with a minimum $500,000 over the following three years.
First supply will commence following the successful registration of the products, anticipated to be early 2022. Under the agreement yearly minimum order quantities applies to the 12 months following the successful registration of three products. Individual purchases orders must be a minimum of $30,000.
Executive Director, Nan-Maree Schoerie, said 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. Several additional contracts are in final stages and ECS will provide further updates as these materialise.
“This agreement highlights the value our B2B strategy creates for our customers, as well as the high quality and growing demand for our medicinal cannabis products. As the coming season approaches, we look forward to scaling our supply to meet our customer needs across Australia and international markets,” Schoerie said.
“We see New Zealand as a key growth market, and given its long history of medicinal cannabis use dating back to GP’s in the country prescribing cannabis tinctures for migraines up until 1955, we expect additional opportunities to arise in the jurisdiction.”