The Ecofibre Ltd (ASX: EOF) share price closed marginally lower by 0.34% today as the ASX cannabis share provided a market update on the impacts of coronavirus on its operations. For context, the S&P/ASX 200 Index (ASX: XJO) ended the day 9.7% lower, just shy of 5,000 points.
To date, Ecofibre has not observed any material impact directly related to the pandemic as the company does not have business interests in Europe or Asia.
Ananda hemp and CBD businesses
Ecofibre's Australian activities are focused on the hemp food business, Ananda Food. The company's primary client in this space is Woolworths Group Ltd (ASX: WOW), where products are sold under the Macro health brand.
Hemp seed products are often referred to as 'super foods', however, Ecofibre reports no panic buying at this stage and does not anticipate the market being negatively impacted.
Ecofibre's main income business is Ananda Health in the United States. The business has not been negatively impacted by store closures caused by coronavirus as independent pharmacies remain Ecofibre's major distribution channel.
Whilst there is a large amount of competition in the hemp-derived cannabidiol (CBD) industry, Ananda Health continues to develop larger distribution relationships that it believes will make significant contributions in the medium term. Twelve additional products that cover health and beauty ranges will be launched by October.
Ecofibre Chief Executive Officer Eric Wang said, "Ecofibre continues to operate in a business as usual capacity. Ananda Health is working at full capacity and there are no breaks in supplying our customer needs. The company is working to support any special needs of our customers due to the current crisis."
Hemp Black
Ecofibre has accelerated part of its Hemp Black strategy in response to expected longer-term changes in consumer behaviour as a result of the coronavirus. Hemp Black will be an exhibitor at NEOCON in June, a year earlier than planned. NEOCON is the world's leading platform for the commercial design industry.
Hemp Black will unveil its technologies across a range of finishes, materials, internal building products, furnitures, fabrics, and floorings. Over the past three years, Ecofibre has been completing research and development on the technical benefits of processed hemp derivatives including anti-microbial activity and conductivity. Hemp Black plans to display office and hospital furniture, aircraft and airport seating, and outdoor and public seating amongst its range.
"Despite recent market volatility, the Board and I maintain an extremely positive medium and long-term view on the business," CEO Wang said. "We have taken all measures to ensure there is no break in supply for our patients who depend on our products for their health and well-being," he added.
