Medical cannabis companies ECS Botanics (ASX: ECS) and Canngea have signed a supply deal that will see ECS supply cannabis medications for Canngea to distribute.
ECS Botanics and Canngea are both old faces in the medical cannabis industry. ECS cultivates medical cannabis across farms in Tasmania and Victoria, while Canngea manufactures and distributes cannabis medicines in both the Australian market and overseas. Canngea has a strong focus on sustainable manufacturing.
As part of their new deal, ECS will supply Canngea with cannabis oil and flower under their Murray Meds license. The agreement with Canngea will continue for the foreseeable future (though it could end if either company goes bankrupt or cannot meet the terms of the agreement). Annually, the deal is tipped to produce $410,000 in revenue for ECS.
According to Canngea’s managing director Ryan Ballantyne, the company’s partnership with ECS will benefit both companies, the domestic medical cannabis industry, and Australian patients.
Collaborations like this strengthen the ability of the Australian medicinal cannabis industry to service growing demand for safe, high-quality and affordable products.
This partnership isn’t the only noteworthy thing ECS has done this year. Last week, ECS announced that it signed a distribution agreement with New Zealand-based company MW Pharma Limited. The company also purchased Murray Meds earlier this year.
ECS is due to send the first shipment to Canngea in October 2021. Like ECS’s other recent deals, the deal with Canngea is part of ECS’s efforts to ramp up its cannabis production and sales in the coming months. The company also has other contracts in their final stages and will update shareholders soon.