‘Stable, material revenue generating business:’ Melodiol’s Canadian subsidiary maintains strong progress

Mernova finalises additional product development activities across edibles, vapes and dabbers
Agreements made with contract growers to supplement existing cannabis capacity given strong demand
Q2 FY24 purchase orders of $1.56m to date, highlighting ongoing strength of Ritual Brand

Special Report: Cannabis play Melodiol Global Health says Canadian subsidiary Mernova continues to make strong operational progress, with strong demand prompting additional product development and agreements with contract growers to supplement existing capacity.

Melodiol Global Health (ASX:ME1) says Mernova has finalised product development activities in recent weeks across a variety of new products including edibles, vapes and dabbers which will be sold under its market-leading Ritual Brand.

The extra products are in addition to those previously announced across the three ranges earlier this month and highlight ongoing strength of Melodiol’s Ritual brand.

The new products include:

Edibles – Sour Lemon Raspberry gummies, 100% THC, 5mg THC/unit, pack of two gummies
Sour Mango Orange gummies, 1:1 THC:CBD, 5mg THC and 5mg CBD per unit, pack of two gummies
Vapes – New flavour Valley Apple Crisp, 1g vape
New flavour –Blueberry Grunt, 1g vape
Dabbers – Black Mamba and Sugarb Bomb punch pipette products, ranging from 83% to 88% THC.

Extra cannabis material to supplement strong demand

ME1 has also reached agreements with two contract growing companies to supply additional cannabis material to supplement supply given currently strong demand.

Muise Cannabis will supply the company with Lemon Haze flower, a strain that Mernova already produces.

Culture Des Summets will supply a new cultivar, Blue Pave, which is a highly touted high THC indica strain which Mernova will market to existing markets.

ME1 says as Mernova’s reputation continues to grow in the Canadian market, it continues to innovate with new products and supply opportunities to capitalise on demand.

Cannabis is legalised in Canada for both medicinal and recreational use with Mernova now having a presence in all of Canada’s major provinces, with additional market entries pending.

The company continues to witness strong demand across the Canadian recreational cannabis marketplace, underpinning company revenue.

During Q2 FY24 to date, Mernova has received purchase orders for $1.56m. The strong performance follows unaudited Q1 FY24 revenues of $1.75m, and FY23 revenues of $6.9m.

‘Stable, material revenue generating business’

CEO and Managing Director, Mr. William Lay says Mernova continues to be a strong performing subsidiary for ME1.

“Mernova has developed into a stable, material revenue generating business unit for ME1,” Lay says.

“On the back of this success, we are excited that the team is exploring new product launches and contract growers to continue capitalising on demand.”

In what could be a further boost for ME1 and other ASX cannabis stocks the U.S. Drug Enforcement Administration (DEA) is considering reclassifying cannabis as a less dangerous drug.

The proposal would recognise the medical uses of cannabis but wouldn’t legalise it for recreational use.

This article was developed in collaboration with Melodiol, 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.