Ecofibre agreed to sell its hemp food and animal products business, part of Ananda Food, to an Elixinol Wellness (ASX:EXL) subsidiary for $3 million.

The deal comprises a $2 million cash payment upon completion in late March, with an additional $1 million earnout tied to cat litter product sales growth until June 2025.

The move aims to exit the sub-scale business.

The sale aligns with Ecofibre's focus on core businesses, redirecting funds into working capital and reducing debt.