• Confirmed purchase orders will see Mernova record revenue of nearly A$900k in October
  • Company’s revenue has potential to grow further as additional purchase orders delivered during month
  • Melodiol says Mernova is becoming a major player in the Canadian cannabis sector

 

Melodiol Global Health’s Canadian subsidiary Mernova Medicinal is forecasting its highest ever monthly revenue of nearly $900k in October, boosted by confirmed purchase orders received.

Melodiol Global Health (ASX:ME1) says its wholly-owned Canadian subsidiary Mernova Medicinal is forecasting a record delivery of A$891,944 in unaudited revenue for October 2023.

October’s expected revenue will exceed Mernova’s previous record month of February 2022 of ~A$808,817 and has the potential to grow further as additional purchase orders are delivered during the month.

Mernova has a total of A$260,200 in confirmed purchase orders scheduled for delivery in November 2023, which will be recorded as revenue for Q4 FY23.

The company now has total unaudited sales and purchase order commitments to A$1.152m for the quarter.

 

Building on record Q3 FY23 growth

ME1 says iinitial sales growth in October and Q4 FY23 more broadly are underpinned by multiple large purchase orders from its provincial partners for its dried cannabis flower, pre-roll joints and electronic vaporiser products which are sold under Mernova’s established Ritual brand.

The solid start to Q4 FY23 follows strong growth in the division’s revenue during Q3 FY23, in which Mernova achieved unaudited record sales of $1.85m.

In Q3 FY23 Mernova reported a 20% increase in sales to A$1.547 million on the previous quarter and a 104% rise on pcp, boosting its revenue by 58% to $7.5m.

Mernova has now achieved its third consecutive quarter of revenue growth.

New branding was introduced for Ritual brand during Q3 FY23, which Merova says has positively impacted consumer behaviour across major Canadian markets.

Canada represents a lucrative market for ME1 as cannabis is legalised for both medicinal and recreational use.

Medicinal cannabis became legal in 2001, while Canada became the second country in the world to legalise cannabis after Uruguay for recreation in 2018.

The country’s cannabis market is projected to reach US$2.9bn in 2023, and with an expected annual growth rate of 15.4%, its market volume will hit $US7.98bn by 2028.

 

Dominant player in Canadian cannabis sector

CEO and Managing Director William Lay says Mernova is becoming a major player in the Canadian cannabis sector.

Mernova’s products are currently available in eight provincial markets including Ontario, Saskatchewan, Nova Scotia, New Brunswick, Yukon, Manitoba, Newfoundland and more recently, Alberta.

Mernova produces the Ritual brand of cannabis products from its 24,000 sq ft (2,230m2)  Nova Scotia facility that is scalable to 200,000 sq ft (18,581m2).

To get a foothold of market share Mernova’s products typically contain >25% THC content, making them some of the highest THC products available on the Canadian market.

“Mernova is set to deliver its strongest monthly sales since inception, which is a major achievement for the division,” Lay says.

“Strong unaudited sales and purchase orders for delivery in October highlight the group’s dominant footprint that continues to build across Canada.

Lay says the results follow extensive amounts of work undertaken by the company to drive sales growth, which includes increased engagement with provincial partners and new branding to harness more customers.

“We are very pleased to see these initiatives materialising into strong revenue growth and look forward to continuing this momentum,” he says.

 

 

This article was developed in collaboration with Melodiol Global Health, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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