IM Cannabis’ (IMCC.C) subsidiary Focus Medical Herbs signed a supply agreement on July 24 with Ever Green Solomon Pharma to buy all of Ever Green’s medical cannabis for five years with an option to extend the term for another five, according to a press release.
Ever Green already has IMC-GAP certification and an 86,000 square foot facility. They intend to start planting for Focus Medical in August 2020, and if there’s an increase in demand from Focus Medical, the facility will expand up to 130,000 square feet if they can get the licensing.
“The team at Ever Green is led by experienced cultivators operating from a first-class facility and we are very pleased that they will be producing medical cannabis bearing the IMC brand. Focus Medical has now established a deep network of high-quality domestic and international suppliers of medical cannabis to cultivate under the IMC brand. In addition to Focus Medical’s own production capacity there are now another six cultivators in Israel with which Focus Medical has signed supply agreements,” Oren Shuster, chief executive officer of IMC.
Ever Green isn’t the company’s first supply agreement of 2020 either.
So far, the company has signed and announced supply agreements with Cannomed Medical Cannabis Industries (CNMD.TASE), Intelicanna (INTL.TASE), Way of Life and Cannation. The supply gained from these companies will be used in addition to Focus Medical’s capacity from its facility in Sde Avraham, Israel.
“Complimenting this domestic production are recent shipments from both Spain and Canada. With decriminalization in Israel expected to significantly increase demand on top of the growing medical cannabis market, a robust network of suppliers is very important to IMC. As we develop these partnerships, we envision a global distribution network that will establish IMC as leaders in global medical cannabis,” said Shuster.
Focus Medical has also announced six pharmacy sales agreements in 2020. These are binding agreements to sell 4,000 kilograms of IMC-branded products in 2020, and a total of 33,075 kilograms worth approximately CAD$193.5 million in revenue with an anticipated gross margin of 50% over the next three years.