Why the Ecofibre (ASX:EOF) share price is rising today

The Ecofibre Ltd (ASX: EOF) share price is on the rise today following the announcement of an exclusive distribution alliance.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Ecofibre Ltd (ASX: EOF) share price is on the rise today following the announcement of an exclusive distribution alliance between Ananda Health and Medisca.

Ecofibre's Ananda Health division is the number one provider of hemp-derived cannabidiol (CBD) for retail pharmacies in the United States. The business produces nutraceutical products, topical creams and ointments.

In existence for over 30 years, Medisca is a company that is focused on compounding pharmaceutical chemical products. The business offers personalised medicine, educational training and support to its partners prescribers, pharmacists, and pharmacist technicians. Medisca has a global footprint across 55 countries including Europe, the United States, Canada, and Australia. The company supplies compounds to more than 10,000 pharmacies world-wide.

In early trade, shares in the hemp products producer are up 3.88% to $1.88.

What's driving the Ecofibre share price?

In today's announcement, Ecofibre advised that it has entered an exclusive distribution agreement with Medisca to roll out its products.

Under the terms of the deal, Ananda will have access to the Medisca network in the United States. This will enable the company to supply Ananda Professional products to more than 5,000 pharmacies from February 1, 2021.

The contract will be valid for 3 years, with an additional 2-year extended option. A minimum sales target will be set 6 months after the contract start date, which must be met to continue to agreement.

Ananda will have exclusive distribution access to the United States, Canada, and Australia. However, Medisca is able to dispense the products to other parts of its extensive network on a non-exclusive basis.

Management commentary

Ananda Health CEO David Neu welcomed the new partnership, saying:

This partnership is one of the most important milestones in the professionalisation of the CBD industry. This is the first time a multinational distributor will be carrying ingestible hemp-derived CBD products.

Medisca global strategy and innovation SVP, Panagiota Danopoulos, added:

Medisca has been closely monitoring the CBD segment over the past several years and we have seen awareness and demand increase for compounding pharmacists across many geographies. To ensure that we can provide our pharmacists the best-in-class CBD product range we are very pleased to announce our exclusive distribution partnership with Ananda Health.

CBD is an exciting new category that still requires significant research and education to ensure it can help as many patients as possible. In conjunction with Ananda Health, we are very excited to be able to give our pharmacists access to the research, tools and training to improve patient outcomes.

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A man sits in despair at his computer with his hands either side of his head, staring into the screen with a pained and anguished look on his face, in a home office setting.
Share Fallers

Why EML, GQG Partners, IGO, and Integrated Research shares are sinking today

In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of…

Read more »

Man drawing an upward line on a bar graph symbolising a rising share price.
Share Gainers

Why EOS, News Corp, Polynovo, and Pro Medicus shares are roaring higher today

These shares are starting the week positively. But why?

Read more »

A couple stares at the tv in shock, one holding the remote up ready to press.
Mergers & Acquisitions

Telstra share price climbs amid $3.4b Foxtel sale

Who is buying the Foxtel business? Let's find out.

Read more »

A young man pointing up looking amazed, indicating a surging share price movement for an ASX company
Share Market News

Brokers say these ASX 200 growth stocks could rise 50% to 70%

Analysts think these shares could be dirt cheap and destined to generate big returns.

Read more »

Two people having a meeting using a laptop and tablet to discuss Seven West Media's balance sheet
Broker Notes

Why these ASX shares could be top SMSF options in 2025

Analysts are bullish on these high-quality shares. Let's find out why.

Read more »

The words short selling in red against a black background
Share Market News

These are the 10 most shorted ASX shares

Let's see which shares short sellers are targeting this week.

Read more »

Smiling man with phone in wheelchair watching stocks and trends on computer
Share Market News

5 things to watch on the ASX 200 on Monday

A good start to the week is expected for Aussie investors. Here's what to watch.

Read more »

A businessman compares the growth trajectory of property versus shares.
Opinions

What's the outlook for shares vs. property in 2025?

The experts have put out their new year predictions...

Read more »