ECS Inks Cannabis Resin Supply Deal With Cannvalate

ECS Botanics (ASX: ECS) has announced a binding agreement to supply cannabis resin for use in medicines by Australian prescriber network Cannvalate.

Cannabis resin is the sticky, sap-like substance produced by a cannabis plant’s trichomes (small, hair-like growths). The light to dark brown substance contains the majority of cannabinoids produced by the cannabis plant such as THC and CBD; and is therefore the most valuable part of the plant. Among the methods of harvesting this liquid gold is supercritical CO2 extraction, which is considered more environmentally friendly, safer, cleaner and cheaper at a commercial scale than some other methods.

The ECS/Cannvalate deal, worth a minimum $4.9 million, commences on the commissioning of ECS’s extraction equipment at Sun Pharma’s Port Fairy facility. Last week, ECS announced Sun Pharma will extract medicinal cannabis biomass cultivated by ECS Botanics to produce GMP resin, and under the arrangement additional biomass will be supplied to Sun Pharma for their commercial requirements.

Cannvalate acts on behalf of Canada’s The Valens Company in Australia, and final medical cannabis products utilised by the company are manufactured by local company Epsilon (ASX.EPN) on Cannvalate’s behalf. Epsilon was formerly known as THC Global, but made a name and ticker change in February this year.

Cannvalate, which claims to be the largest network of cannabis medicine prescribers in Australia, says it has provided more than 40,000 patient consultations to date.

“We are delighted that Cannvalate (and their partner Valens) have selected ECS as their resin supplier and look forward to a long and rewarding relationship,” said ECS Executive General Manager, Nan-Maree Schoerie.

There are quite a few players directly and indirectly involved in this deal. Commenting on that, Cannvalate Chief Operating Officer Darryl Davies said:

“As the medicinal cannabis industry in Australia matures, we are now 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.”

It’s a future that may make it more challenging to keep up with who is doing what with whom.

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