MGC Pharmaceuticals Ltd (ASX: MXC) has announced that it has signed a multi-year supply agreement with European medicinal products distributor Mabsut Life, to supply cannabidiol (CBD) extract from its European extraction facility.
Under the binding agreement, MGC Pharmaceuticals will supply a specialised industrial-grade CBD extract, which has been developed and produced using the Company’s leading European Research and Development (R&D) facilities. The specialised CBD extract will be supplied to Mabsut Life and commercialised under Mabsut Life’s own CBD electronic cigarette brand and distributed throughout its sales network in Central and Eastern Europe in countries that include Germany, the Czech Republic and Austria.
The terms in the agreement set out a minimum supply by MXC of 12kg of extract per quarter which is set to generate approximately $1 million in annual sales for the Company. Upon signing the agreement, the initial purchase order for 2kg of extract has been placed by Mabsut Life and includes an upfront payment of US$40,000 which MXC expects to receive within 2 weeks.
The deal is for an initial two-year period and will then automatically renew each year upon mutual agreement from each party.
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