A fast-growing Australian health and wellness company is eyeing a big piece of a very big pie that is getting close to being baked: Australia’s over-the-counter medicinal cannabis S3 market.

Brand and distribution company Wellnex Life (ASX: WNX) has its targets firmly set on becoming one of the first companies to offer an over-the-counter product in this soon-to-emerge market.

With Australia’s existing SAS (Special Access Scheme) market worth around $423 million, Wellnex expects the S3 (Schedule 3) market – which removes the prescription requirement hurdle for consumers – to be significantly larger.

Globally, the cannabidiol market was worth US$12.8 billion in 2021 and is forecast to grow at a 21.7% CAGR from 2022-28 to reach US$56.2 billion.

CEO George Karafotias says Wellnex is at “an important inflection point” and faces multiple growth opportunities – the largest of which, he says, is likely to be its foray into the S3 market.

“Our JV with OneLife Botanicals, combined with our key competencies around regulatory know-how and distribution networks, provide us with all the ingredients required to evolve as a major player in this large and fast-growing market,” Mr Karafotias said.

Wellnex’s recently reported strong start to FY23 has continued in September, with budgeted revenue for the month at $2.9 million (up 141% on the prior corresponding period of $1.2 million) and significant contract manufacturing purchase orders received.

Revenue for the quarter is expected to be a record-breaking $6.8 million (up 78% vs PCP), putting the company on track to meet its guidance for FY23 of $29 million in revenue.

“We are seeking to maintain this momentum with multiple exciting brand and product launches planned over the coming months to propel the company forward and create value for shareholders,” Mr Karafotias said.

As part of this expansion trajectory, Wellnex recently announced it has entered into a binding asset sale agreement to acquire 100% of Mr. Bright, a premium teeth whitening brand.

Mr. Bright forecasted annualised revenue of $3.955 million in FY22, climbing to $6.56 million in FY24.

Wellnex CEO George Karafotias will be holding an investor briefing tomorrow, Thursday 15th September at 11am (AEST), where he will provide a more in-depth company update. Click here to book in.

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

Past performance is not a reliable indicator of future performance.

Sources:

• ASX Announcement, Wellnex Life forms Joint Venture with OneLife Botanicals
• gminsights.com, Cannabidiol Market size 
• freshleafanalytics.com.au, Australian Medicinal Cannabis Market Patient, Product and Pricing Analysis