Wellnex Life tops-up bank balance with $6m to fund over-the-counter medicinal cannabis product plans
Under a joint venture with OneLife Botanicals, Wellnex plans to offer one of Australia’s first over-the-counter medicinal cannabis products.
Wellnex Life (ASX: WNX) has raised almost $6 million via a capital raising and strategic investment to pursue its strategy of offering one of Australia’s first over-the-counter medicinal cannabis products – along with a strong pipeline of other product launches.
The company set out to raise $2 million via a share purchase plan last month, which has closed after allowing oversubscriptions – bringing total funding to $2.815 million.
Wellnex chief executive officer George Karafotias said the company was “overjoyed” with the “strong” shareholder support, particularly amid volatile economic conditions globally.
Mr Karafotias added Homart Pharmaceuticals made a $3 million strategic investment in the company.
The investment is expected to further strengthen Wellnex’s manufacturing and product expertise, while expanding its export network and contacts.
Another entity, also scooped up $150,000 in Wellnex as part of strategic investment.
Reach Markets was the lead manager of the capital raising and Wellnex’s cash balance is now $5.965 million higher.
Over the counter medicinal cannabis product
The goal of the capital raising was to secure funding to advance Wellnex’s strategy of offering one of Australia’s first over the counter medicinal cannabis products.
This is being progressed in joint venture with OneLife Botanicals.
The product will be launched under Australia’s new Schedule 3 (S3) classification.
According to Wellnex, the existing medicinal cannabis market is limited by prescription requirements under the Australian Government’s Therapeutic Goods Administration’s (TGA) Special Access Scheme (SAS).
This SAS market alone is estimated to be worth $423 million in 2022.
Once the new S3 classification comes in, Wellnex predicts the market for over-the-counter medicinal cannabis products will be significantly larger.
Under the joint venture, OneLife Botanicals is purchasing a state-of-the-art TGA, Office of Drug Control (ODC), and Good Manufacturing Practice (GMP) approved facility to cultivate and process medicinal cannabis.
Wellnex will have exclusive use of the facility, which has a 20,000 tonne per annum capacity.
Strong brand and product pipeline
In addition to over-the-counter medicinal cannabis product development, Wellnex will use funds from the capital raising to finance inventory required for launching new brands and products throughout the remainder of 2022 and into 2023.
Mr Karafotias said these new launches will further accelerate the company’s revenue and margins.
Next month a new e-commerce platform will be launched, followed by the acquisition of teeth whitening brand in December.
Prior to the over-the-counter availability, Wellnex will launch its medicinal cannabis products under the SAS. This is expected to occur before the end of the year.
In January next year, the company will launch the Pharmacy Own brand under a deal with Australian pharmaceutical and medical consumable distributor Clifford Hallam Healthcare (CH2).