• Record sales drives Mernova to deliver third consecutive quarter of revenue growth
  • Sales up 20% on Q2 FY23 and 104% on pcp with Mernova YTD revenue of more than $4.95 million
  • Mernova continues to build dominant footprint across Canada, where recreational cannabis is legal

 

Record sales have delivered Melodiol Global Health’s wholly-owned Canadian subsidiary Mernova its third consecutive quarter of revenue growth. 

Melodiol Global Health Limited (ASX:ME1) announced Mernova Medicinal has achieved its third consecutive quarter of revenue growth with A$1.85 million in unaudited sales.

Sales were up 20% on Q2 FY23 and 104% rise on the prior corresponding period.

Sales generated during Q3 take Mernova’s year-to-date revenue to more than $4.95 million for the FY23 period, highlighting its ongoing growth trajectory.

Mernova has now achieved its third consecutive quarter of revenue growth, which was strengthened by several large purchase orders from province partners for its dried cannabis flower, pre-roll joints and electronic vaporiser products,  which are sold under its established Ritual brand.

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

Board and management anticipate growth to continue during Q4 FY23, following the receipt of several purchase order totalling ~$870k to be finalised current quarter.

The purchase orders include one for ~$574k from the Nova Scotia Liquor Corporation, highlighting the ongoing momentum that Mernova is generating across Canada and its largest sales generating province of Nova Scotia.

 

Enormous growth potential

Cannabis is legalised in Canada for both medicinal and recreational use. Medical cannabis became legal in 2001, while Canada became the second country in the world to legalise cannabis after Uruguay for recreation in 2018.

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 for these products, Mernova’s products typically contain >25% THC content, making them some of the highest THC products available on the Canadian market.

ME1 says the growth potential is enormous with Canada’s cannabis industry 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.

Mernova’s products are currently available in eight provincial markets including Ontario, Saskatchewan, Nova Scotia, New Brunswick, Yukon, Manitoba, Newfoundland and more recently, Alberta, booking its first purchase order in September after gaining registration approvals.

 

Steps to continue sales growth

CEO and Managing Director William Lay says it’s particularly pleasing to see Mernova double sales from the prior corresponding period.

“These results, coupled with the purchase orders the company has received for Q4 FY23, highlight the dominant footprint that the division is building across Canada.”

Lay says during the period board and management undertook several steps to drive sales growth.

“These included the introduction of new branding for the Ritual range, as well as increased engagement with province partners,” he says.

“We are very confident that these initiatives have laid a strong foundation for future increases in sales.”

 

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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