The Althea Group Holdings Ltd (ASX: AGH) share price is on course to end the week on a positive note.
At the time of writing, the cannabis company’s shares are up 2% to 52 cents.
Why is the Althea share price pushing higher today?
Investors have been buying Althea shares this morning following the release of a positive announcement.
That announcement reveals that its Canadian subsidiary, Peak Processing Solutions, has received an initial purchase order from Peace Naturals Project.
Peace Naturals Project is a subsidiary of C$4.4 billion and Nasdaq listed cannabis giant Cronos Group.
According to the release, the initial purchase order forms part of a larger one-year commercial services agreement and is valued at approximately C$134,000.
Under the agreement, Peak Processing will perform the hydrocarbon extraction of cannabis biomass and process the extract into cannabis concentrate products, ready for sale into the Canadian adult-use cannabis market.
Management notes that the capability to produce hydrocarbon extracted cannabis concentrates is in limited supply in Canada. Positively for Althea, Peak Processing is among a handful of processors able to service this in-demand product category. Production is expected to commence this month.
Althea’s CEO, Joshua Fegan, was pleased with the agreement and notes that its Peak Processing business has started 2021 strongly.
He said: “It is pleasing to see how quickly the Peak business is taking off this year, attracting a world-class supply agreement with Peace Naturals, just a few months post licensing. We look forward to continuing to secure supply agreements with other like-minded players in the fast-growing Cannabis 2.0 space and further demonstrating the world-class cannabis extraction capabilities of Peak.”
Today’s gain means that the Althea share price has now risen an impressive 73% since this time last year.
This compares very favourably to a 5% gain by the benchmark ASX 200 index.