Two ASX-listed healthcare stocks are set to join forces and bring medicinal cannabis formulations to the Australian market.
Elixinol Wellness Ltd (ASX:EXL) (OTCMKTS:ELLXF) is poised to enhance its service of the Australian CBD market under a new partnership with pharmaceutical distributor Health House International Ltd ().
From July, Health House’s Australian offshoot will distribute Elixinol’s hemp-derived CBD products in Australia via the Therapeutics Goods Administration’s (TGA) Special Access Scheme.
Ultimately, the agreement gives Elixinol access to the 5,700 Australian pharmacies that prescribe cannabinoid formulations under the scheme.
With the new agreement in tow, Elixinol hopes to put two of its hemp-derived products on the market by 2021’s third quarter.
“Contribution to people’s wellbeing”
Elixinol Wellness CEO Oliver Horn said the company was very excited to partner with Health House and bring its products to market in Australia.
“A fast-growing number of patients are receiving help in the form of CBD via the TGA’s Special Access Scheme and it is rewarding to know that soon our Elixinol products will make a contribution to people’s wellbeing.
“Elixinol is well known for being an established quality brand and we can now satisfy demand for our products.
“This agreement delivers on our strategy to create a global wellness business by accessing the growing Australian market and utilising our Hemp Foods Australia business and corporate head office capabilities to grow our local business which already accounts for over a third of total group revenues.”
In an announcement detailing the agreement, Elixinol said Health House’s extensive reach in the Australian market was a particularly attractive quality.
Broadly, the new deal has been described as a significant milestone for the ASX-listed healthcare company, which is already offering its hemp-derived CBD products in the Americas, Europe and the UK.
The market is also growing in Australia: up until March 2021, the TGA had approved over 100,000 patient applications for medical cannabis and it’s expected these numbers will continue to grow.
Health House chief operating officer for Australasia Paul Mavor said: “Elixinol is one of the world’s biggest CBD companies with a global footprint. Health House looks forward to supporting their range of medicines and hemp products in the Australian market.”
Essentially, the distribution deal will kick off on July 12, 2021, and run for a two-year term. As per standard procedure, either party can back out of the deal with 90 days written notice.
Furthermore, now that it’s signed on with Health House, Elixinol has opted to terminate its distribution agreement with PharmaCann Pty Ltd.
Under the former agreement, PharmaCann distributed Elixinol products to the Australian market under the TGA’s Special Access Scheme. The deal was struck in late July 2020.
Considering Health House’s wide-reaching distribution network and access to specialists, Elixinol believes it’s better positioned to execute distribution opportunities in Australia under the Health House deal.
The ASX-lister maintains any contributions from the PharmaCann agreement have not been material to the company’s operations.