ECS Botanics Reports Record-breaking Harvest in Latest Quarter

Medicinal cannabis company ECS Botanics Holdings (ASX:ECS) published its latest quarterly report on Tuesday (July 30), detailing company achievements and strategic investments during the period.

The report highlights ECS' highest-ever harvest of 6.8 tonnes of biomass, up 62 percent year-on-year. The company attributes the increase mainly to outdoor production, and believes it will be able to compete better with cheaper imports.

A portion of the report also details the company’s progress in direct-to-consumer (B2C) sales, which began after ECS made a one year agreement with Elite Medical Solutions in May of this year.

The partnership offers automatic renewal options and guarantees a minimum annual order of AU$380,000, with anticipated growth. It will retail ECS’ soft gel capsules and oral liquids under ECS' military veteran’s brand, RAP.

The company expects to launch its AVANI rapid range of VESIsorb capsules by its first fiscal quarter of 2025.

"As a result of the B2C initiatives, the increase in exports and the addition product available for sale, we are anticipating strong revenue growth in the next quarter," ECS states in its press release.

The company also notes the recent completion of a propagation and genetics room, a space that will allow it to “provide sufficient clones for the expansion and breed genetics” best suited to ECS' growing conditions.

Nine new protective crop enclosures (PCE) have also been ordered to keep up with demand. ECS said these PCEs are expected to increase production of premium dried flower by over 200 percent once fully operational.

Finance-wise, ECS delivered revenue of AU$4.5 million for its fourth fiscal quarter of 2024. Compared to the year-ago period, the amount is slightly down from AU$4.8 million. The company explained that this is due to pricing pressure in the Australian market, while B2C sales and exports to Germany remain in the early stages of development. Still, the amount is a 12 percent increase from the prior quarter, when ECS' revenue came in at AU$4 million.

“Launching our B2C brand is a crucial step in capturing additional market share and increasing our revenue streams … Our investments in infrastructure, including the construction of new PCEs and the propagation and genetics room, ensure that we continue to provide the best possible product for patients,” said Managing Director Nan-Maree Schoerie.

"Our record production this quarter, culminating in 6.8 tonnes of untrimmed dried flower, showcases the strides ECS has made in enhancing our production and cultivation to the highest possible standard,” she continued. “These achievements are pivotal as we set up to meet surging demand in both local and export markets.”

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Securities Disclosure: I, Gabrielle de la Cruz, hold no direct investment interest in any company mentioned in this article.