ECS Botanics (ASX:ECS) share price edges lower despite positive update

The ECS Botanics Holdings Ltd (ASX: ECS) share price is treading lower despite announcing a positive update in regards to Murray Meds.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

ECS Botanics Holdings Ltd (ASX: ECS) share price is trading lower in mid-afternoon trade. This comes despite the company announcing that Murray Meds has signed a Memorandum of Understanding (MoU) with an Australian-based cannabis group.

When news broke out this morning, the ECS share price rose to an intraday high of 7.5 cents. However, some profit-taking has contributed to its shares falling to 6.9 cents, down 2.8% at the time of writing.

What did ECS announce?

The ECS share price is softening regardless of the positive announcement made earlier today.

According to its release, ECS advised that Murray Meds entered a MoU with an undisclosed subsidiary of a large medical cannabis company.

In January this year, ECS signed a binding term sheet to acquire 100% of Victoria-based medical cannabis cultivator, Murray Meds.

Located on the Murray River in North Western Victoria, Murray Meds operates a licenced medical cannabis cultivation and manufacturing facility. The company produces around 3,500kg of medicinal cannabis per year consisting of dried flower, oils, and tinctures.

Terms of the MoU

Under the conditions of MoU, Murray Meds and the contracting party will meet throughout the 12-month term to discuss the potential cultivation and supply of cannabis. This will include a review of Murray Meds production capacity in servicing the contracting party's needs.

It is believed that the MoU will eventually be replaced with a production plan and quality contract in the long-term.

ECS stated that it's too early to grasp quantities, specifications, and pricing of the cannabis products from the MoU. In light of this, no financial figures could be provided in the release.

About the ECS share price

The ECS share price has accelerated over the last year, jumping to more than 90%. The company's shares hit a low of 1.5 cents in March 2020, before strongly rebounding from December onwards.

Based on the current share price, ECS has a market capitalisation of around $30 million.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A happy young couple lie on a wooden deck using a skateboard for a pillow.
Share Gainers

These were the best-performing ASX 200 shares in March

These shares made their shareholders smile in March thanks to some very big gains.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Opinions

2 ASX shares I have been buying in 2024!

I’m a believer in the long-term outlook of these stocks.

Read more »

Stock market chart in green with a rising arrow symbolising a rising share price.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a massive day for the ASX 200, with a new all-time high recorded.

Read more »

A man sits thoughtfully on the couch with a laptop on his lap.
Technology Shares

This ASX tech stock rocketed 60% in March! Can it keep on delivering?

After soaring in March, the ASX tech stock is now up 169% since this time last year.

Read more »

Broker Notes

Brokers name 3 ASX shares to buy now

Here's why brokers are feeling bullish about these three shares this week.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Burgundy Diamond Mines, Clarity Pharmaceuticals, EML, and Zip are sinking today

These ASX shares are ending the week in the red. But why?

Read more »

A young women pumps her fists in excitement after seeing some good news on her laptop.
Share Gainers

Why Mesoblast, Newmont, Pilbara Minerals, and Platinum shares are jumping

These ASX shares are ending the week strongly. But why?

Read more »

a young boy dressed up in a business suit and tie has a cute grin and holds two fingers up.
Opinions

2 of my top ASX 200 shares to consider buying before April

I would happily exchange dollars for these two shares right now.

Read more »