Healthcare

NAB lends ECS Botanics $2m ahead of VIC cannabis farm expansion

Fri 22 Jul 22, 1:36pm (AEST)
A generic image of a commercial cannabis operation
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Key Points

  • ECS Botanics wins $2m funding facility from NAB
  • Funds will underpin company’s Stage 3 expansion at Victorian cannabis farm
  • ECS has also sold its hemp division to Ecofibre for $250,000; is looking for buyers for its TAS farm

ECS Botanics (ASX:ECS) has received a $2m funding facility from National Australia Bank (ASX:NAB) to underpin expansion operations, as the company also reports strong buyer interest in its Tasmanian medicinal cannabis farm. 

The company is looking to sell off its Tasmanian assets as the company prioritises operations at its farm in Victoria.

Coming months will see the company undergo its Victorian Stage 3 expansion, which is expected double the size of its current cultivation area. 

Several upgrades have been made at the Victorian farm this year.

NAB’s $2m loan will fund the ongoing efforts to expand acreage and, ultimately, boost output. 

So, what exactly is ECS doing in Victoria?

To get an idea of the scope of the company’s Vic operations, it’s interesting to look at the scale of activity since July 2021:

  • Constructed a new warehouse 

  • Taken on 4 new drying rooms 

  • Constructed a new propagation station 

  • Installed over 2,100m2 of protective enclosures 

Management seeks to boost its profile heading into 2023. 

“In order to meet the demand for our products, we have…[invested] in new capacity which will look to double the secure cultivation area,” the company's managing director Nan-Maree Schoerie said. 

“Deploying the most appropriate funding maximises value and returns for our shareholders,” Schoerie added, in reference to NAB’s facility. 

ECS Botanics’ drive to corner a larger share of the Australian medicinal cannabis and hemp products market is prompting market interest: the company’s share price has risen 41% in the last month. 

Sale of hemp division to Ecofibre 

The company has also sold off its hemp food and wellness division for $0.25m to Ecofibre (ASX:EOF) subsidiary Ananda Food. 

Ananda Food has regularly supplied ECS with products to sell in the past; the acquisition is expected to finalise in early August. 

As part of the sale of the company's hemp division, Ananda will now start to sell hemp-based nutraceuticals (read: health supplements).

After a startling few months, ECS Botanics' share price appears to be regaining steam
After a startling few months, ECS Botanics' share price appears to be regaining steam

 

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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication. Email Jon at [email protected].

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