ECS Botanics has secured a binding three-year exclusive supply agreement with Frankfurt-based Ilios Sante, valued at close to A$10m.
The deal requires ECS to supply a minimum of A$9.9m worth of GMP-manufactured medicinal cannabis products over the contract's duration. Initial deliveries are expected to commence once product registration is finalised.
ECS head of European operations Michael Clark described the agreement with a long-term German partner as an "essential building block" of the company's European Union market access strategy.
He added: "Ensuring that our German partner not only had the necessary narcotic licences, but also its own clinic network, and the ability to adapt to future changes in cannabis legislation were key elements in securing the agreement.
"This partnership enables ECS and Ilios Sante to grow an exciting and sustainable business together in Europe's largest medicinal cannabis market."
Ilios Sante, headquartered in Frankfurt, is a fully licensed wholesaler focused on the procurement and distribution of cannabinoid-based medical products as an alternative medicine. The company sits within the Bloomwell Group, which also operates medicinal cannabis platform Algea Care.
Managing director Nan-Maree Schoerie said: "Germany is Europe's largest medicinal cannabis market, and we have worked hard to identify the right in-country partner for ECS.
"Ilios Sante is well entrenched in the German pharmaceutical market, with links to a significant medicinal cannabis therapeutic platform.
"The contract followed Ilios Sante's own due diligence in assessing ECS as its chosen partner, and it is clear they value what we offer and our strong pharmaceutical approach to cannabis.
"In our experience customers generally exceed minimum order quantities and we are optimistic this agreement will deliver a similar outcome."
Either party may exit the agreement with 10 days' notice if the other breaches any of its provisions or fails to establish or maintain required industry quality standards and does not rectify the issue within 30 days.
ECS also retains the right to terminate if Ilios Sante defaults on payments or if an insolvency event occurs.
Shares closed at $0.025 on January 4, 2023, up from $0.021 at the open.
