• Melodiol’s subsidiary Mernova looks to achieve significant quarter-on-quarter growth in Q3
  • Mernova also continues to advance compliance pathway for GMP certification
  • Mernova continues to build its presence in Canada, which legalised cannabis in 2018

Melodiol Global Health’s subsidiary Mernova Medical is on track to significantly increase its quarter-on-quarter growth. 

Mernova’s monthly sales across its leading range of cannabis products continue to accelerate following strong July and August-to-date figures. 

Melodiol Global Health (ASX:ME1) says its 100% owned Canadian subsidiary has achieved Q3 revenue to date of $1.3 million only halfway through the quarter, compared to Q2 full quarter revenue of $1.5 million. 

Entry into Alberta province to boost sales

Mernova recently made its formal market entry into Alberta after meeting key regulatory compliance standards in the region. 

Alberta — the eighth province where Mernova has been approved to sell — is the second largest provincial cannabis market in Canada and maintains strict compliance requirements. 

ME1 says Mernova has a competitive advantage following its successful submission process. 

Mernova expects to book first sales in Alberta prior to the end of August for six stock-keeping units (SKUs) that have now been approved for sale. 

Sales momentum across major Canadian markets will also be complemented by the launch of new rebranded product logos and packages and a revamped website, which have been approved for production and scheduled for soft launch later this week. 

As revenue accelerates, Mernova remains committed to making cannabis products that adhere to the highest Good Manufacturing Practices (GMP) standards. 

Mernova is now in the process of finalising its vendor qualification SOP documentation and addressing final gaps in consultation with regulators to complete its Quality Risk Assessment framework. 

During the quarter, Mernova has also advanced its Validation Master Plan documentation to formally align its development pathway with designated GMP steps and is working on a Site Master Plan to meet GMP requirements.

ME1 is also pursuing a European Good Manufacturing Practice (EU GMP) licence for Mernova. 

The licence is expected to be secured in the first quarter of 2024, opening the door to major sales opportunities beyond Canada and into Australia and Europe. 

 

Building its North American presence

Mernova has being working to build its North American presence including in Canada, where the Canadian Government legalised access to cannabis for recreational and medicinal purposes on October 17, 2018. 

Canada became the second in the world after Uruguay to formally legalise the cultivation, possession, acquisition and consumption of cannabis and its by-products. 

Canada is the first G7 and G20 nation to do so with distribution and sale of cannabis controlled by the provincial governments. 

Revenue in the Candian cannabis market is projected to reach US$3.90 billion in 2023 and show a CAGR between 2023-2028 of 15.40%, resulting in a market volume of US$7.98 billion by 2028.

 

Strong traction throughout Canada 

ME1 CEO William Lay says the trading update confirms the strong traction that Mernova has established throughout Canada’s cannabis market. 

“We are particularly pleased with the company’s revenue run-rate in the September quarter to-date, which leaves it on track to underpin further growth for the group,” he says. 

“Equally however, it’s pleasing to note the group’s progress with respect to its national distribution network and ongoing compliance initiatives to ensure it can produce cannabis products at scale to the highest standards of quality and compliance.”

Lay says Mernova’s successful entry into Alberta opens up a significant new addressable market for the Company, providing further upside at a point where revenue growth in its core target markets is already accelerating. 

“With further operational updates pending in the second half of 2023, in line with the Company’s stated growth strategy, we are excited by the opportunity for Mernova to consolidate its position as a leading cannabis business in the North American market,” 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.

Read MoreBiotechCannabisHealth

Featured Companies

You might be interested in