ECS Botanics has had another incredibly productive quarter, producing revenue of over $2m in Q3. And with the European majors opening up, the vertically integrated company says it’s in a great position with harvesting currently underway.
Benchmark Aussie medicinal cannabis play ECS Botanics (ASX:ECS) has delivered more than $2million in revenue for the third quarter, as demand for its high-quality dried flower and oil products continues to grow.
For the three months ending March, ECS generated a tad over $2m in revenue, which is a 43% increase on the previous quarter.
Looking back over the same time last year, ECS just delivered a 452% beat on the pcp.
Almost all of the producers revenue (around 86%) has come from medicinal cannabis, which serves nicely to highlight the company’s successful transition to a medicinal cannabis growth focused business.
ECS says it’s in a good position to keep delivering consistently stronger revenues with the harvest season currently in full swing.
“Our strategy, quality and cost of production is on point, and we expect will help us differentiate from the competition as we continually build sales locally and into Europe,” commented ECS’ Managing Director, Alex Keach.
During the quarter, ECS secured half a million dollars of purchase orders for its dried cannabis flower from Lyphe Group, UK’s largest patient care medical cannabis company.
The first two shipments have already been completed, and those represented the first international exports of ECS’s Australian grown dried cannabis flower.
Subsequent to the end of the period, ECS also received another purchase order from Lyphe valued at approximately $350,000.
The company’s pivot to medicinal cannabis has been what even sceptics would be calling thoroughly successful.
At this time last year, ECS generated 100% of its revenue from food and wellness sales. But revenue growth in both dried flower and oil products has now substantially outpaced the wellness revenue.
To build upon the existing sales pipeline, ECS distributed promotional materials during the quarter to existing customers as well as to prospective business leads.
This follows the filming of new marketing and promotional videos campaigns, as well as a new refreshed corporate website; https://ecs-botanics.com/our-story/
During the quarter, ECS paid $500,000 for the property which formed part of the Murray Meds acquisition.
That transaction has successfully positioned ECS as one of Australia’s largest vertically integrated medicinal cannabis companies.
Overfors oversight: New exec to drive growth
To execute on its growth strategy, ECS has appointed Jason Overfors as Post-Harvest Production Manager at its Victorian Facilities.
Overfors has extensive expertise in the cannabis industry, having previously undertaken the role as Harvest Manager with one of Canada’s largest cannabis companies, Hexo Corp (NASDAQ: HEXO, TSX: HEXO).
Overfors was also responsible for leading a team of over 100 employees, and managed all aspects of the groups harvest progression – including field harvest, bucking, trimming, and processing of cannabis flower.
In his new role with ECS, Overfors will assist with increasing production at scale, and ensuring the company’s high-quality standards are maintained.
ECS has a cash balance of $4.8m, leaving the company well placed to continue the execution of its business plan
External factors like regulations are also starting to blow in ECS’ favour.
For example, the US Marijuana Reinvestment and Expungement (MORE) Act, which is expected to be filed in the senate within the next two months, if passed cannabis will be decriminalised on a federal level.
In its outlook, ECS says it’s very optimistic about Europe and the UK, particularly within the European medicinal cannabis and longer term adult use cannabis markets.
This article was developed in collaboration with ECS Botanics, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.