As demand grows for its range of recreational cannabis products, ME1 has recorded strong sales figures in the June quarter via a 42% increase on pcp in Q2 FY23. This also led Mernova to achieve a 20% revenue rise in H1 FY23 when compared to the pcp.

Melodiol Global Health (ASX:ME1) has announced its wholly-owned Canadian subsidiary

Mernova Medicinal has recorded sales in the June quarter that considerably exceed total sales in the previous quarter.

The rise in sales follows continued demand for its leading range of recreational cannabis products in the Canadian market.

Demand is expected to further increase during the North American summer period.

In Q2 FY23 Mernova generated ~$1.574 million in unaudited sales, marking a 42% rise on pcp of $1.091 million.

Total FY2023 sales for the business division to-date now sit at $3.095 million – a 20% rise on the same time last year.

ME1 said H1 FY23 sales to date further highlight the company’s growth trajectory.

Strong start to Q3 FY23

Further consolidating the group’s strong recent operating momentum, Mernova reported a strong start to Q3 FY2023 with confirmed purchase orders of $298k already in the month of July to-date.

The result sets the company up to capitalise on its increasingly well-established sales and distribution networks to further accelerate growth over the coming months.

The ongoing growth in revenue is underpinned by Mernova’s enviable position in the Canadian recreational cannabis market.

Mernova is currently selling its range of dried flower, pre-roll joint and electronic vaporiser products into eight of the country’s major provinces.

The company continues to increase its range with provincial partners and is confident that sales will continue to increase over the coming months. 

Mernova management also remains focused on pursuing revenue growth while simultaneously executing a stringent cost management strategy.

Focus on international expansion

The subsidiary has also increased its international expansion efforts, alongside leading North American regulatory and scientific cannabis consulting agency, CannDelta Inc. in a push to fast-track cannabis exports to Australia and Europe.

As part of that process, Mernova has started an application to obtain a European Good Manufacturing Practice licensing process for its Canadian manufacturing facility in Nova Scotia and is confident of approval by late 2023 or early 2024.

Building strong brand in Canada

ME1 CEO and managing director William Lay said the latest sales result is further evidence that Mernova is establishing strong momentum in the Canadian market.

“The group’s accelerated sales trajectory over the recent months validates its ongoing strategy of seeking revenue growth with a disciplined focus on cost management,” he said.

“We are confident that sales will continue to rise in Q3, as well as over the remainder of the financial year.

“The group has a number of product development initiatives underway, as well as product ranging opportunities in train with several large distribution partners which have the potential to underpin ongoing growth.”

Strong growth for Health House International

It’s been a good start to July for ME1 also announcing this week recent financial results of its wholly-owned Australian subsidiary Health House International (HHI), which highlight consistently strong 2023 growth in revenue and adjusted EBITDA across its operating divisions in Australia and the UK.

For the five-month period ended 31 May 2023, HHI generated combined currency-adjusted unaudited revenues of $9.55 million.

Top-line revenue growth flowed through to unaudited adjusted EBITDA in operating units for the period of $897k reflecting an adjusted EBITDA margin of 9.3%.

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.