Investors have reacted favourably to news Wellnex Life has signed a joint venture with OneLife Botanicals positioning the company to take full advantage of regulatory changes for medicinal cannabis products in Australia.

Shares in Wellnex Life Limited (ASX:WNX) have jumped 10.29% to 7.5 cents today after the company announced a 50/50 joint venture with OneLife Botanicals (OneLife).

OneLife is a Victorian-based licensed cannabis producer, and manufacturer of cannabis and cannabis-based products.

The company has a world class, fully operational, state of the art cannabis production, research and product development facility with capability and license to produce 20 tonnes of product per annum.

OneLife recently acquired leading Australian cannabis manufacturing facilities Medipharm Australia, that will enable the company to manufacture and bring to market medicinal cannabis products immediately.

Race to market under S3 changes

In December 2020 the Therapeutic Goods Administration (TGA) down-scheduled certain low dose cannabidiol (CBD) preparations from Schedule 4, prescription medicine, to Schedule 3 over-the-counter (OTC) pharmacist-only medicine.

Since the changes were announced the race to get medicinal cannabis products on the shelves of Aussie pharmacies has been well and truly on.

Wellnex said the OneLife joint venture will enable it to be fast to market with cannabis-based products, including those in the S3 category.

With certainty of supply and the ability to manufacture bespoke products, Wellnex will be one of few companies that will have full traceability of the whole production and manufacturing process, using Australian product and knowledge.

Registration process underway

Wellnex has started the process to obtain registration of medicinal cannabis products under the S3 scheme.

According to Fresh Leaf Analytics H2 2021 report, the market is estimated to be worth $3 billion by 2024.

With the joint venture, Wellnex is aiming to be one of the first companies to have a registered product in the S3 market by the end of CY 2023.

Upon obtaining registration of an S3 product, Wellnex will earn a 4% stake in OneLife that will give the company ownership across the entire value chain.

Production to start for SAS market

The joint venture plans to start production of registered products for the Australian market under the TGA’s special access scheme (SAS) by the end of CY 2022.

The SAS market in Australia is valued at $500 million and growing rapidly, according to figures in the Fresh Leaf Analytics report.

Wellnex has reported it has advanced negotiations with leading pharmacy retailers to stock its range under the scheme.

The OneLife deal comes on the back of further good news for Wellnex. The company recently announced  unaudited revenue jumped by almost 7% on last year, despite the global supply chain glut delaying key shipments.

Wellnex CEO George Karafotias said the joint venture signed with OneLife marks an exciting step for Wellnex in being one of the first to bring cannabis-based products to the Australian market.

“We are targeting production of a medicinal cannabis product appropriate for the SAS market by the end of this year and are aiming to have a registered product in the S3 market by the end of CY23,” Karafotias said.

“We’re pleased to partner with OneLife, who recently acquired Medipharm Australia, a world class manufacturing facility, enabling Wellnex full traceability of the whole production and manufacturing process of cannabis products using Australian product and knowledge.”

This article was developed in collaboration with Wellnex Life, 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.