Medicinal cannabis products producer ECS Botanics (ASX: ECS) has struck an exclusive distribution deal with California-based Terphogz LLC, paving the way for the arrival of the famed cannabis strain ‘The Original Z’ (commonly known as Zkittlez) in Australia. This partnership marks a significant milestone in Australia’s burgeoning medicinal cannabis market, allowing patients access to one of the world’s most iconic cannabis strains.
Under the eight-year agreement, ECS will manufacture and supply Terphogz’s unique range of medicinal cannabis products, including ‘The Original Z’ and its highly sought-after genetic crosses, across Australia, Germany, and New Zealand. The strain, recognised for its distinctive terpene profile, has gained acclaim in the global cannabis market, winning multiple awards including top prizes at the Emerald Cup in California.
This partnership aligns with ECS Botanics’ strategy to diversify its offerings and bring world-class medicinal cannabis products to emerging markets.
“We are thrilled to partner with Terphogz to introduce The Original Z and its associated therapeutic benefits to new markets,” said ECS Managing Director, Nan-Maree Schoerie.
She emphasised the opportunity to bring high-quality cannabis products, produced to stringent GMP-certified standards, to patients in Australia and beyond.
Why Australia?
Australia’s medicinal cannabis market has been steadily growing, with an estimated value of $594 million, and is expected to expand in the coming years as regulatory frameworks become more established and patient demand increases. ECS sees this as an opportune time to introduce ‘The Original Z’, leveraging its strong position in the market to roll out the product through a new direct-to-consumer channel.
While the strain is relatively unknown in Australia, it is highly popular in markets like California, where it has developed a loyal following for its rich, fruity flavours and unique therapeutic properties. ECS is confident that this demand will translate to the Australian market as medicinal cannabis becomes more accessible to patients.
Who Will Benefit?
In Australia, ‘The Original Z’ will initially be available through ECS Botanics’ direct-to-consumer model, which caters to patients who are prescribed medicinal cannabis. The product will be available to patients suffering from conditions that qualify for medicinal cannabis treatment under Australian regulations. This includes chronic pain, anxiety, and other debilitating conditions, with growing evidence supporting the efficacy of cannabis as a therapeutic solution.
What’s Next?
Beyond Australia, ECS aims to expand distribution of Terphogz products to Germany, where the cannabis market is projected to reach $7.4 billion by 2033. Meanwhile, plans for New Zealand are still in development, with ECS exploring the best channels to introduce the products to this market.
For FY24, ECS Botanics reported revenue of $20.5 million which represented a 31% increase on the previous year. Capitalising on the rising scale of their operations, they saw substantial improvements in product margins which contributed to $2.0 million net profit after tax, a 305% annual increase. Further operational scaling is anticipated with the Company having commenced construction on nine new Protective Crop Enclosures.
Mitch Korver is a Business Writer focused on high-growth companies listed on the ASX in the small and medium cap space.
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