Melodiol Global Health Q1 FY24 unaudited revenue of $4.4m marks a 91% increase on pcp
Company remains focused on reducing operating costs, while pursuing high growth revenue opportunities
US Drug Enforcement Administration to reclassify cannabis from Schedule I to Schedule III, a move well received by North American cannabis markets
Special Report: Melodiol Global Health has generated a 91% increase in unaudited revenues on the prior corresponding period (pcp) to $4.4m in Q1 FY24, following record group revenues of $21.6m in FY23.
Melodiol Global Health Limited (ASX:ME1) says the latest result further highlights the company’s ability to identify and capitalise on high growth opportunities.
The cannabis play says Q1 FY24 revenue was underpinned by ME1’s 100%-owned Canadian subsidiary, Mernova Medicinal Inc, which generated $1.6m revenue for the period, up 6% on pcp.
ME1 says its wholly-owned operating division Health House International (HHI) also contributed $2.4m in revenue.
The company says HHI’s ongoing contribution to the company’s revenue since its acquisition HHI in May 2023 has further underpinned ME1’s stated strategy of leveraging strategic M&A to bolster operations.
In other highlights for the quarter:
Receipts from customers totalled $5m, a 94% rise on pcp;
Net cash used in operating activities reduced by 50% from $2.2m in Q4 FY23 to $1.1m in Q1 FY24;
ME1 finished the quarter with $600k in the bank.
Focus on reducing operating costs
ME1 says it remains resolutely focused on reducing operating costs, while pursuing high growth revenue opportunities to push towards profitability.
The company says it continues to take active steps to refocus its efforts and resources into higher performing business units.
ME1 is also exploring opportunities to undertake a strategic divestment or closures of non-performing business units.
CEO and managing director William Lay says the company remains committed to building on its significant revenue base while focusing equally diligently on reducing expenses.
“During Q1 FY24, the company continued to deliver solid revenue, which followed record yearly revenues of $21.5m in FY23,” he says.
Lay says the bulk of the company’s revenue was generated by Mernova and HHI.
“These two wholly-owned divisions are considered by the board to be the foundation for the business going forward“ he says.
“As previously advised, the board have made the strategic decision to channel resources to optimise both operations and we look forward to providing additional updates in the coming months.”
US moves to reclassify cannabis as less dangerous drug
In what could be significant news for ME1 and other ASX cannabis stocks the U.S. Drug Enforcement Administration (DEA) is looking to reclassify cannabis as a less dangerous drug.
The proposal would recognise the medical uses of cannabis but wouldn’t legalise it for recreational use.
Instead, under the proposal cannabis would move from the Schedule I group to the less tightly regulated Schedule III.
According to news reports the proposal must be reviewed by the White House Office of Management and Budget, before a public-comment period and review from an administrative judge.
In August 2023 the US Department of Health and Human Services (HHS) requested the DEA to consider easing restrictions on marijuana to a Schedule III drug.
Schedule III drugs are defined as “drugs with a moderate to low potential for physical and psychological dependence.”
The use and possession of marijuana in the US is currently illegal at the federal level.
News of a possible reclassification has seen cannabis companies with interests in the US soar. Canopy Growth Corp (TSE:WEED) is up ~70% in the past five days, while Aurora Cannabis Inc (TSE:ACB) has risen more than 25% and Tilray Brands Inc (NASDAQ:TLRY) is up 36% for the period.
This article was developed in collaboration with Melodiol, 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.
The post Melodiol delivers strong revenues in Q1 as US moves to reclassify cannabis appeared first on Stockhead.
