Shares in MGC Pharmaceuticals reached a six-month high following an announcement on Friday that it has signed a deal to supply cannabidiol (CBD) cosmetic products to South Korea-based Varm Cosmo, according to a report published by the Financial Times.

The deal will generate revenue of AU$40 million per year for MGC’s joint venture MGC Derma. Under the terms of the contract, Varm Cosmo will buy a minimum of 15,000kg a month of CBD cosmetic products.

Varm Cosmo employs CBD for its moisturizing and anit-aging properties, while MGC claims that the non-psychoactive compound can be used to treat psoriasis and inflammation.