Cannasouth shares jumped more than 12% to their highest level in almost 12 months after signing a major deal with a German pharmaceutical company.
The NZX-listed cannabis company signed a supplier agreement with Weeco Pharma for the supply of cannabis flower from New Zealand into Europe, it said in a statement.
The shares rose as high as 41 cents in early trading on the NZX and were recently up 9.6% at 40 cents.
Cannasouth didn’t provide details of the minimum sales volume, but said current market pricing indicated the total value of the deal during the second and third years could be worth between $12 million and $15m.
The companies agreed to work together to develop a cannabis cultivar to best suit the European market.
Cannasouth said it would retain sufficient flower to supply the NZ market to enable its medicinal cannabis products to be verified. The flower was expected to be a popular form of medicinal cannabis with the country’s patients, it said.
Chief executive Mark Lucas said Cannasouth would benefit from the opportunity while it “ramped up” production and completed its good agricultural and collecting practices certification – which was expected soon.
Lucas said the deal meant Cannasouth could proceed with its growing programme and begin the next phase of its cultivar development.
“Exporting medicinal cannabis flower has always been part of our strategy for generating additional revenue streams while we develop our own medicinal cannabis products for the New Zealand market.”
Global demand, particularly in Europe, created an early revenue opportunity in the export of premium cannabis flower, Lucas said.
“We have taken our time to select the best partner in Europe to represent Cannasouth and deliver our flower to one of the fastest-growing medicinal cannabis markets in the world,” he said.
