Medicinal cannabis company Althea Group (ASX: AGH) has inked a product supply and distribution agreement with Cannvalate which is expected to underpin further rapid sales growth in Australia.
According to Althea, Melbourne-based Cannvalate boasts Australia’s largest network of medicinal cannabis prescribing clinics spanning all states.
Under the agreement, Cannvalate will become a non-exclusive distributor of Althea’s medicinal cannabis products in Australia with the aim of rapidly increasing its network of existing prescribers, primary specialist doctors and patient base.
Commenting on the arrangement, Althea chief executive officer Joshua Fegan described Cannvalate as an excellent partner for the distribution of its products.
“This agreement is expected to further accelerate our sales growth and is evidence of the rapidly growing market and validity of what we are doing in Australia,” he said.
Unlisted Cannvalate only received its licence to sell medicinal marijuana last year and already has a network of more than 1,000 doctors and 600 pharmacies.
Cannvalate-led prescriptions currently account for more than 30% of the Australian market, with the total number of monthly prescriptions increasing by over 800% in the last twelve months.
The company has already reviewed Althea’s product range outlining a strategic plan on how to target each of its products to the most appropriate specialists.
“We look forward to working with Althea and its team to ensure maximal uptake of its products in the Australian cannabis marketplace,” Cannvalate chief executive officer Dr Sud Agarwal said.
Undergoing rapid growth
Melbourne-based Althea, which burst onto the ASX last September, has been able to rapidly increase its prominence in Australia’s medicinal cannabis market since entering the sector in May last year.
To date, 354 patients are being prescribed Althea’s medicinal cannabis products through 109 doctors.
Now with Cannvalate in the mix, Althea’s capabilities have been given an additional boost, assisting the company reach as many patients as possible in a steadfast manner.
Althea is focused on growing its presence in the medicinal market both locally and internationally.
Earlier this month it announced the acquisition of subsidiary Althea UK, paving the way for Althea to become one of the first medicinal cannabis companies to enter the United Kingdom.
Further deals could still be in the pipeline, with the growth-hungry company considering more opportunities.
“Althea continues to assess partnership opportunities with a view to continuing to strengthen our footprint and will update the market as material developments emerge,” Mr Fegan added.
As the market opened, Althea’s shares jumped 2.5% to $0.40.