Wellnex Life raises $6.2m to fund entry into over-the-counter medicinal cannabis market
Wellnex Life will use the funds to accelerate the company’s path to commercialising a medicinal cannabis product and launching a health and wellness e-commerce platform.
Wellnex Life (ASX: WNX) has raised $6.2 million through the issue of secured convertible notes to accelerate its entry into the high-growth, high-margin S3 designated over-the-counter medicinal cannabis market.
The funds will also be used to launch a targeted e-commerce platform designed to offer a comprehensive range of Wellnex-branded health and wellness products.
The convertible notes have a conversion price of $0.21 per share, with a term to maturity of 24 months (minimum term of 12 months) and a coupon rate of 9% per annum.
Exciting opportunities
Chief executive officer George Karafotias said the raising would provide a platform for Wellnex to take advantage of exciting opportunities in the health and wellness space.
“The introduction of medicinal cannabis and the launch of a unique e-commerce platform will enable us to further increase our presence in this rapidly growing industry,” he said.
“We have made significant progress in the last 10 months, with the launch of multiple new brands and a supply agreement with GlaxoSmithkline … with the funds raised we look forward to progressing our aim of becoming a major participant in this market.”
Big development
The introduction of medicinal cannabis as an over-the-counter product under the Therapeutic Goods Administration’s S3 (“pharmacist only medication”) schedule has been hailed as a “big development” for the health and wellness market.
Medicinal cannabis is currently only available under the SAS-B (“special access scheme – unapproved drugs”) schedule, which involves patients obtaining a doctor’s prescription.
This market in Australia was worth $230 million in 2021, increasing to $432 million in 2022.
Approval process
The process to obtain S3 approval for a new medicinal cannabis product is expected to take approximately 18 months.
Wellnex plans to use the funds raised to accelerate the path to approvals, production and supply to market by the end of 2023.
Mr Karafotias said the company had already embarked on the approvals process.
“Coupled with our strong relationships with pharmacy retailers and wholesalers, we believe we are in a strong and unique position to be one of the first Australian companies to enter this market,” he said.