Melodiol Global Health Ltd (ASX:ME1)’s wholly-owned subsidiary Mernova Medicinal Inc has made significant progress towards obtaining a European Good Manufacturing Practice (EU GMP) licence to export from its cannabis manufacturing facility in Nova Scotia, Canada, to Australia and Europe.
The company's site plan analysis has revealed that minimal additional infrastructure is required to facilitate the export of cannabis from the Nova Scotia facility.
This is crucial to reduce capital expenditure associated with the licence application.
2024 certification
Mernova's successful collaboration with the renowned North American regulatory and scientific cannabis consulting agency CannDelta Inc has been instrumental in the progress.
The EU GMP certification, once obtained, will enable Mernova to significantly expand its international presence, with a specific focus on the Australian market.
At this point, the company is confident that it can achieve EU GMP certification by the first quarter of next year.
Major milestone
In addition to completing its site plan analysis, Mernova has also successfully completed the Good Agricultural and Collection Practices (GACP) site quality risk assessment, a pivotal step in the application process.
Data obtained from this assessment will be used in the licence submission.
Moreover, Mernova has finalised its Good Manufacturing Process (GMP) site quality risk assessment, which has identified specific quality document revisions and validation work that will be necessary for compliance.
These document revisions and qualifications are expected to be completed in the next few months.
Eye on Australia
Currently operating at around 60% capacity to meet existing demand in Canadian markets, Mernova plans to leverage the under-utilised grow rooms in a cost-effective manner to fulfil the expected demand in the lucrative Australian market.
As cannabis sales in Australia are considerably higher than in Canada, this provides the company with ample opportunities and the potential to enhance both sales volumes and gross margins.
The company's expansion into the Australian market will be facilitated through another subsidiary, Health House International.
Expanding international footprint
“The company’s progress in its EU GMP licence application has highlighted the exceptional quality standards that Mernova’s facility already operates at,” Melodiol chief executive officer William Lay said.
“We are very pleased to have achieved such strong progress in a short time period.
“The strategic decision to pursue an EU GMP licence for Mernova will allow Melodiol to significantly scale operations and expand our international footprint outside of Mernova’s national market.
“This also has the potential to lead to a significant growth in revenue which will underpin group profitability.”