Ongoing cannabis product demand drives more revenue growth for ECS Botanics
ECS Botanics is on track to report another jump in quarterly revenue.
Medicinal cannabis and hemp company ECS Botanics (ASX: ECS) has announced it is on track to deliver another consecutive quarter of revenue growth thanks to sales of its dried flower and cannabis oil products.
The company expects to report revenue of about $2 million for the quarter due to end 31 March, which would represent a 39% increase on the previous quarter and would be 440% higher than the same period last year.
ECS is attributing its climbing revenue to ongoing demand from local and international customers for its high-quality dried flower and cannabis oil products.
Medicinal cannabis revenue growth is continuing to become a greater share of sales of the company, outpacing hemp food and wellness revenue growth.
“During the same period last year, ECS generated 100% of its revenue from hemp food and wellness sales, while we expect current quarter revenue to be approximately 20% of group revenue,” the company stated.
“This is reflective of the company’s strategy and transition to a medicinal cannabis dominant business, which provides greater margins and long-term value for shareholders.”
Post-production appointment
ECS said additional near-term growth is expected to be underpinned by the recent appointment of Jason Overfors as post-harvest production manager to assist in the company’s post-production process.
Mr Overfors was previously the harvest manager for one of Canada’s largest cannabis companies, Hexo Corp (NASDAQ: HEXO, TSX: HEXO).
In his new role with ECS, he will assist with increasing production at scale, and ensuring the company’s high-quality standards are maintained. Mr Overfors will also support ECS’ ongoing cost management initiatives, implementation of efficient automated technology and sustainable farming protocols.
The appointment of Mr Overfors coincides with the imminent completion of additional drying room capacity ahead of a large outdoor harvest.
“Jason has an extensive skillset, which we look forward to leveraging for our current harvest’s post-harvest production. His knowledge of the cannabis sector will be instrumental in our growth trajectory,” ECS managing director Alex Keach said.
New marketing initiatives
ECS has filmed several new marketing videos promoting the company’s established operations, manufacturing practices, product benefits and management team.
The videos will be distributed to existing customers as well as potential new business leads in both local and international markets to build its sales pipeline. ECS’ website will also be updated this quarter.
“Our seed to GMP product business model for the B2B market continues to resonate with a range of customers, and this has allowed the company to unlock a number of value accretive opportunities to underpin revenue growth,” Mr Keach said.
“The sector is going through a shakeout and period of consolidation of which ECS is benefiting with onboarding of new customers.”
In today’s announcement, ECS also reported the successful completion of a second export shipment to Lyphe Group in the United Kingdom and said registration of cannabis oil products in Germany is continuing despite COVID-19 restrictions delaying the supply of these products to Armour Group.