Cannabis deal closes, opening door for WNX to enter market

One of Australia’s leading cannabis manufacturing facilities has been formally acquired by a joint venture partner of Wellnex Life, propelling the health and wellness innovator forward in its goal to be a first mover in the emerging over-the-counter medicinal cannabis space.

One of Australia’s leading cannabis manufacturing facilities has been formally acquired by a joint venture partner of Wellnex Life, propelling the health and wellness innovator forward in its goal to be a first mover in the emerging over-the-counter medicinal cannabis space.

The $6.9 million deal between state-of-the-art cannabis facility MediPharm Labs and Victorian manufacturer of cannabis and hemp-based products OneLife Botanicals was first announced in July, with the acquisition now completed.

At the time of the first announcement, OneLife CEO Andrew Grant said the purchase would better enable OneLife to produce high-quality medicinal cannabis products by integrating manufacturing into the end-to-end supply chain.

“The integration of this business with our existing cultivation facility facilitates savings in capital investment, access to operational efficiencies and establishes us as a significant supplier in the Australian medicinal cannabis industry,” he said.

For Wellnex (ASX: WNX), access to MediPharm will allow the company to enter the Special Access Scheme (SAS) market by the end of CY22 and be one of the first to market with a registered over-the-counter medicinal cannabis product under the Schedule 3 (S3) classification, subject to TGA approval.

Australia’s existing SAS market is worth around $423 million, but Wellnex expects the S3 market – which removes the prescription requirement hurdle for consumers – to be significantly larger, with some companies forecasting it could grow to over $3 billion.

Wellnex CEO George Karafotias said OneLife’s acquisition of MediPharm puts Wellnex a step closer to obtaining approval for over-the-counter medicinal cannabis.

“This opens up a new, untapped market for medicinal cannabis products that don’t require a prescription, and has considerable public demand,” Mr Karafotias said.

“We are keenly focused on being one of the first companies to deliver a Schedule 3 product to the market. Upon TGA approval of an S3 product, Wellnex will have access to an end-to-end supply chain to deliver high-quality medicinal cannabis over the counter to Australians.”

Wellnex has begun the process to obtain registration of medicinal cannabis products under the S3 scheme and anticipates registration will be completed by the end of CY23.

Upon obtaining this approval, Wellnex will be issued a 4% stake in OneLife, giving Wellnex ownership across the whole value chain.

Reach Markets is hosting a special medicinal cannabis panel discussion tomorrow, Thursday 13th October at 12pm (AEDT), where industry leaders – including Wellnex CSO Zack Bozinovski and Cann Group COO Shane Duncan – will explain how they see the market developing, why they think they are positioned to benefit and how they are approaching the opportunity. Click here to book in.

On Friday, 14th October at 12pm (AEDT), Wellnex CEO George Karafotias will be holding an investor briefing where he will provide an update on the company’s goal to be one of the first movers in the over-the-counter medicinal cannabis space. Click here to book in.

Reach Corporate provides Corporate Advisory Services to WNX and have been engaged by them to manage their investor communications.

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