Shares in hemp food company ECS Botanics (ASX: ECS) have spiked following the announcement of a major deal with supermarket Woolworths (ASX: WOW).
The deal will see ECS Botanics' 250ml Hemp Oil product distributed into 850 Woolworths stores.
The reaction from the market has been swift, with shares in the hemp food company up 46.34 per cent to $0.06 per share at 11.26am AEDT.
This is despite the uncertainty surrounding the deal; ECS says it is still unclear how much revenue will be generated from the deal with the supermarket, as no minimum volumes have been guaranteed.
"This is a very large step in our commercial strategy and shows the strength of our new distribution partner Just Foods Australia (JFA), who has delivered very early on in the relationship," says ECS managing director Alex Keach.
"We expect to update the market regarding wider distribution of ECS products as retailer range reviews are completed and JFA meets with further retail groups."
In September ECS signed an exclusive memorandum of understanding with American-based Disruption Labs to distribute, sell and import the company's hemp-derived CBD dietary supplements.
Disruption Labs owns 100 per cent of subsidiary Reset Bioscience, a CBD company based in Texas which has developed the THC-free organic hemp-derived product.
The deal positions the company well for the moment CBD products are available legally for general consumption in Australia, or for when ECS acquires the correct licences.
Business News Australia
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support