The Althea share price has risen by 10% after the medicinal cannabis company announced a supply agreement with a South African company.
The post Althea (ASX:AGH) share price lifts 10% today. Here’s why appeared first on Motley Fool Australia. –
Althea Group Holdings Ltd (ASX: AGH) shares are rocketing higher today after the company announced a wholesale supply agreement with a South African company. At the time of writing, the Althea share price has risen by 10% to 55 cents on news of the deal.
The agreement will enable the medicinal cannabis company to expand into the growing South African market.
What was in the agreement?
Althea reported today it has signed a deal with South Africa-based company, AfriCann Ltd. Under the wholesale supply agreement, and following receipt of all required licenses and permits, AfriCann will import a range of Althea branded finished products for sale and distribution within South Africa.
Althea says the agreement represents a forecast revenue amount of approximately $650,000 over the initial term of 2.5 years. The first shipment is expected to be delivered to AfriCann in the second quarter of 2021.
The deal represents a significant opportunity, according to Althea, with the South African legal medicinal cannabis industry estimated to be worth approximately USD$667 million by 2023.
Commenting on the agreement, Althea CEO, Josh Fegan, said:
We continue to build the Althea brand in highly regulated medicinal cannabis markets across the globe, with South Africa adding to a growing list of territories including Australia, the United Kingdom, and Germany.
The agreement with AfriCann is an exciting development for the company and reinforces our position as one of the world’s leading medicinal cannabis brands.
What does Althea do?
Althea is an Australian licensed supplier and exporter of pharmaceutical grade, medicinal cannabis.
In November, the company became the the first commercial supplier of Australian-made medicinal cannabis products in Germany, after obtaining approvals from the country’s health department.
The German medicinal cannabis market is said to be worth $2.4 billion, and an initial order of 2,000 products will be delivered by Althea to Germany this month.
Two days ago, Althea also announced that it has made inroads into the Canadian market, after sealing an agreement to manufacture United States cannabis brand Tinley’s products in Canada.
How has the Althea share performed in 2020?
The Althea share price has gained 45% in 2020 so far. The share price started the year at 38 cents, but dropped to as low as 15 cents in March at the height of the pandemic-led selloff.
The Althea share price reached a 52-week high of 67 cents in September and commands a current market capitalisation of $123 million.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Why the Althea (ASX:AGH) share price soared 6% today
- Why the Althea (ASX:AGH) share price is climbing higher today
- Why Althea, BWX, Damstra, & GrainCorp shares are charging higher
- Althea (ASX:AGH) share price on watch following 2 new agreements
- ASX stock of the day: Elixinol Global (ASX:EXL) shares blaze new highs
Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.