Shares in ECS Botanics jumped 20% this morning after the company announced the signing of two supply agreements worth almost A$12 million.
The cultivator will supply Entoura with $10.2m of dried flower over the next three years, while Precision Pharmaceuticals will take delivery of dried flower worth $1.7m over the next 12 months.
Both firms will receive their first supply in the first quarter of FY24.
The news saw ECS Botanics shares climb 20% in morning trading, rising to $0.024c per share.
Under the offtake agreements, ECS will grow a minimum of three strains exclusively for Melbourne-based Entoura.
Precision Pharmaceuticals will also receive exclusive strains for inclusion in the Sydney firm’s product range.
ECS said the agreements “demonstrate the scaling benefits of recent capacity upgrades” which include yield improvements, more outdoor growing, and new protective cropping enclosures.
Managing director Nan-Maree Schoerie said: “It is rewarding to see the momentum across our entire business with sales, distribution and customer relationships performing strongly.
“ECS’ focus is on building a cost-efficient, large-scale, B2B business that can supply a multitude of retailers with medicinal cannabis flowers and oils.”
ECS last week announced it has increased production by more than 50% in the last 12 months following the addition of six protective cropping enclosures at its Murray River facility.
The company is also conducting a trial within one of the enclosures to extend the growing season and production capacity.