The Elixinol Global Ltd (ASX: EXL) share price could push higher today following the release of an announcement out of the medicinal cannabis company this morning.
What did Elixinol Global announce?
This morning Elixinol Global announced that its wholly-owned subsidiary, Elixinol LLC, has entered into a manufacturing and supply agreement with Pet Releaf in the United States.
According to the release, Pet Releaf is the pioneer and market leading brand for hemp-derived cannabidiol (CBD) oils, topicals, and treats for pets.
Its products are currently sold online and in over 4,000 independent pet stores across the USA and globally.
The release explains that Elixinol has exclusively produced and supplied CBD extract sourced from USDA Organic certified hemp strains grown specifically for Pet Releaf since its inception in 2014. In April 2019, Elixinol acquired a 25% equity interest in Pet Releaf.
Today's agreement is for an initial 18-month term which can be renewed annually for multiple years. It will see Pet Releaf purchase a minimum US$18 million (approximately A$26.8 million) worth of products over the term and pay a deposit of US$1.8 million (approximately A$2.7 million) by way of three equal payments during the term of the agreement.
Elixinol Global's chief executive officer, Stratos Karousos, was pleased with the agreement.
He said: "This exclusive agreement with Pet Releaf further strengthens our relationship and ensures Pet Releaf's products will have scalability and ongoing quality of supply. The agreement is consistent with Elixinol's growth strategy, increasing distribution of our branded products through partnerships with trusted and highly regarded brands."
This sentiment was echoed by the company's chief technology officer, Gabriel Ettenson.
He said: "This agreement reflects Elixinol's commitment to continue to build on the excellent relationship that both companies have enjoyed over many years and leverage seed to sale supply chain efficiencies with extensive scalability, in-house scientific expertise and proprietary processing technologies."
