Australian cannabis firm ECS Botanics secures AU$24 million offtake deal

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Australia-based medical cannabis company ECS Botanics Holdings has secured a binding offtake agreement to supply dried flower to MediCann Health Pty.

MediCann is a medical marijuana health care company that provides patients with access to doctors and pharmacists who have experience prescribing cannabis-based medication.

In the deal announced this week, ECS said it will supply 24 million Australian dollars ($15 million) of pharmaceutical-grade cannabis flower over five years to Perth-based medical cannabis company MediCann.

The arrangement starts in January 2024 and involves more than 4 tonnes (4.4 U.S. tons) of dried cannabis flower, according to a news release.

The companies both expect the offtake volumes to exceed the minimum contracted amounts.

“We are excited to announce the expansion of our partnership with MediCann through this newly extended, long-term supply agreement,” ECS Managing Director Nan-Maree Schoerie said in a statement.

“MediCann’s dedication to putting patients at the forefront of their business aligns perfectly with our own commitment to delivering top-tier medicinal cannabis.”

The latest offtake deal comes on the heels of binding offtake agreements signed earlier this year.

In June, ECS announced that it had secured two offtake deals worth AU$11.9 million.

ECS said it will supply Good Manufacturing Practice (GMP)-manufactured dried flower worth approximately A$10.2 million over a period of three years to Melbourne-based medical cannabis company Entoura Pty.

ECS also disclosed a deal to supply GMP-manufactured dried flower worth AU$1.7 million to Sydney-based Precision Pharmaceuticals Pty.

The latter deal covers 12 months but will be reviewed annually.

ECS will start shipping medical cannabis for the latter two deals in the first quarter of 2024.

Shares of the company are traded on the Australian Securities Exchange as ECS.