At the time of writing, the agribusiness and hemp food company's shares are up 7.32% to 4.4 cents. It's worth noting that during morning trade, ECS shares rose to an intraday high of 4.8 cents before profit-takers swopped in.

What did ECS announce?

In today's statement, ECS advised it is achieving strong sales growth from its first commercial harvest at its Victorian facility. The robust result is being driven by new customer contracts along with increased demand for its medicinal cannabis products. Current quarter sales have reached more than $0.5 million, with orders received from both domestic and international customers.

As a result, the company is forecasting to hit $2 million in sales by the end of the calendar year of 2021. This marks a significant jump on the $0.58 million recorded for the first-half of FY21.

In order to cater for the surging demand, ECS is currently expanding its premium dried flower cultivation capacity. Construction of 2,000 square meters of protective cropping enclosures will add to the company's existing 1,000 square meter facility. The additional room allows ECS to cultivate specific strains of the medicinal cannabis premium dried flower for its customers.

Furthermore, the company is also extending its Good Manufacturing Practice (GMP) licence to include packing dried flower products.

ECS managing director, Alex Keach commented:

The sales performance from our Victorian facility is very encouraging and demonstrates the growing appeal for Australian grown products. Based on the orders received and the increased enquiries from local and European customers, we are increasing our premium dried flower cultivation capacity threefold. There is significant momentum in the business and several developments are imminent.

ECS share price summary

The ECS shares rocketed higher in the last 6 months, before coming back to early December levels. This wild share price rise was attributed to the company's takeover announcement of Murray Meds.

Looking at a longer timeframe, ECS shares have soared by more than 50% in the last 12 months.

The post Why the ECS Botanics (ASX:ECS) share price is smoking the ASX today appeared first on The Motley Fool Australia.

Let's take a look at what is driving the agribusiness and hemp food company's share price down.

Why is the ECS Botanics share price falling?

The ECS share price falls as investors indicate displeasure with the company's latest update that will perhaps further dilute shareholdings.

In today's release, ECS advised that it has received strong commitments to complete a $4 million share placement. Offered at 5 cents apiece, sophisticated and professional investors have confirmed to partake in the company's capital raising efforts.

In addition, a rights issue will be available to existing shareholders at 5 cents per share to raise an extra $2 million. For every 17 ordinary shares held, 1 new share can be issued.

The offer price represents a discount of 19% on the company's 5-day volume-weighted average price of 6.2 cents. However, after today's steep fall, the placement only offers a 10% mark-down.

This will be completed under the company's listing rule 7.1, which allows 15% of its shares to be issued without shareholder approval. The placement of the shares from sophisticated and professional investors is expected to start trading on 24 March 2021. The rights issue timetable will be released later this week.

ECS said as well as providing additional working capital to accelerate growth, it would use the funds for several business affairs. This will include completing its acquisition of Murray Meds and purchasing plant and equipment.

In the next 6 months, the company plans to execute a raft of sales agreements and partnerships. Furthermore, it will seek to expand its Victorian and Tasmanian operations, further boosting manufacturing capacity.

What did the managing director say?

ECS managing director Alex Keach commented:

Having received shareholder approval for our acquisition of Murray Meds, we are excited to complete this transaction which positions ECS as the largest, lowest cost and most geographically diverse cannabis producer in Australia.

Murray Meds has executed several important supply agreements in recent weeks for medical cannabis dried flower, concentrate and final dose oils in Australia as well as Europe with several more expected soon.

The ECS share price has gained more than 160% since this time last year and is up over 40% year-to-date.

The post ECS Botanics (ASX:ECS) share price slumps 10% on capital raising efforts appeared first on The Motley Fool Australia.

Supply agreement propels the ECS Botanics share price

The ECS Botanics share price is surging today following the company's latest announcement.

In today's release, ECS advised that Murray Meds has entered into a supply agreement with an Australian cannabinoid company. This is the second supply contract that Murray Meds have signed within the last 4 weeks. The previous deal related to a three-year supply agreement with the Armour Group to sell and export medicinal cannabis oils in Germany and the United Kingdom.

Under the newly signed contract, Murray Meds will supply medicinal cannabis dried flower, concentrate, and oils to the undisclosed cannabinoid company.

The term will run over 3 years and generate total revenue of $750,000. However, the bulk of this ($500,000) will be spent within the first year. ECS has kept all other details about the supply agreement under wraps, particularly around pricing and units.

Who is Murray Meds?

In January, ECS signed a binding term sheet to acquire 100% of Murray Meds, a Victoria-based medical cannabis cultivator. Shareholders approved the acquisition this week, with settlement expected soon.

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.

Words from the managing director

ECS managing director Alex Keach welcomed the news, saying:

This is the second supply contract Murray Meds has signed in recent weeks and validates that a low capex and operating medicinal cannabis facility can still meet pharmaceutical quality of the oil and premium priced dry flower market. I am so pleased that this narrative is becoming a reality in the market place.

ECS has previously collaborated and worked closely with the customer. We look forward to furthering this relationship and, with the acquisition of Murray Meds, expanding the ECS sales network from our production hubs in Victoria and Tasmania.

ECS Botanics share price snapshot

The ECS share price has rocketed since the beginning of December, gaining more than 113%. Recent positive announcements from the company look to have pushed its shares higher, to within sights of its all-time high.

Based on the current share price, ECS has a market capitalisation of close to $28 million.

The post Why the ECS Botanics (ASX:ECS) share price is moving higher today appeared first on The Motley Fool Australia.

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.

The post ECS Botanics (ASX:ECS) share price edges lower despite positive update appeared first on The Motley Fool Australia.

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. Murray Meds has harvested and packed 350kg so far this year, even before the full picking season starts in April.

During morning trade, the ECS share price shot up to 5.4 cents. However, its shares have since retreated to 5.0 cents at the time of writing, up 16.28%.

What's pushing the ECS share price higher?

ECS Botanics advised that it has signed a binding term sheet with Flowerday Holdings Pty Ltd. The acquisition will see ECS own 100% of the issued capital in Murray Meds, and 100% of the issued share capital in Flowerday Farms. In addition to the transaction, ECS will also purchase Flowerday Land Property.

Under the deal, ECS will pay $1 million for the rights to 100 million fully paid ordinary shares, deemed at an issue price of 5 cents per share. The company will pay a further $1.5 million within 12 months, pending completion of the Flowerday Land Property purchase.

ECS Botanics said the shares will be escrowed on a split basis for 12 (50%) and 24 (50%) months.

The company said once the acquisition is concluded, ECS will be one of largest vertically integrated medicinal cannabis businesses in Australia. The deal complements the company's main operations based in Tasmania, as well as recent agreements such as its MediPharm Labs takeover.

What did management say?

ECS managing director Alex Keach welcomed the acquisition, saying:

As a combined group, we are positioning to become the largest and most geographically diversified cannabis producer in Australia. Murray Meds has harvested its maiden THC crop and currently has another crop growing.

This deal allows ECS to deliver earlier and more substantial revenue, while adding value to cannabis as communicated in our December announcement to purchase equipment for the extraction of cannabis resin. The deal sets us up nicely to become a globally recognised large scale, low-cost cultivator and manufacturer of medicinal cannabis.

Murray Meds founder and managing director Nan-Maree Schoerie, added:

The opportunities that this deal creates for Murray Meds, its customers and employees is tremendously exciting.

Both organisations are very grounded in their approach to delivering affordable medicinal cannabis as naturally and sustainably as we can, with shared values and an inherent drive to deliver for patients and shareholders.

The post Why the ECS (ASX:ECS) share price is soaring 16% higher today appeared first on The Motley Fool Australia.