ECS Botanics has signed a binding agreement to supply medicinal cannabis resin to Cannvalate in a deal worth a minimum A$4.9 million.
Supply will begin within the next 12 months and continue for a further three years following the commissioning of extraction equipment at ECS’ supply and tolling partner Sun Pharma’s facility.
Cannvalate focuses on the late part of the medicinal cannabis value chain via a large network of prescribing doctors. It distributes on behalf of Canadian firm The Valens Company in Australia, which recently entered into an exclusive partnership with Epsilon Healthcare to manufacture GMP-grade products on its behalf.
Cannvalate will use the resin to service its relationship with Valens.
The agreement is expected to generate ECS around $592,500 in revenue over the next 12 months, after which there is a minimum obligation of $4,906,000 over the remaining term.
Cannvalate chief operating officer Darryl Davies said: “As the medicinal cannabis industry in Australia matures, we are seeing niche businesses who excel at their own individual core competencies flourishing collaboratively.
“To see a transaction of this magnitude between industry leaders working harmoniously together is a glimpse into the future of the Australian medicinal cannabis industry.”