Two health stocks listed on the ASX will join forces and bring medical cannabis formulations to the Australian market.
Elixinol Wellness Ltd (ASX: EXL) (OTCMKTS: ELLXF) is ready to enhance its service to the Australian CBD market as part of a new partnership with pharmaceutical distributor Health House International Ltd ().
From July, the Australian subsidiary of Health House will distribute Elixinol’s hemp-derived CBD products in Australia via the Therapeutics Goods Administration (TGA) Special Access Scheme.
Ultimately, the agreement gives Elixinol access to the 5,700 Australian pharmacies that prescribe cannabinoid formulations under the program.
With the new agreement, Elixinol hopes to launch two of its hemp-derived products by the third quarter of 2021.
“Contribution to the well-being of the people”
Oliver Horn, CEO of Elixinol Wellness, said the company is delighted to partner with Health House to bring its products to market in Australia.
“A rapidly growing number of patients are receiving help in the form of CBD through the TGA’s Special Access Scheme, and it is worth knowing that our Elixinol products will soon be making a contribution to people’s wellbeing.
“Elixinol is known as an established quality brand and we can now meet the demand for our products.
“This agreement is in line with our strategy of building a global wellness business by gaining access to the growing Australian market and leveraging our Hemp Foods Australia business and the capabilities of our corporate headquarters to grow our local business, which already accounts for over a third of the Group’s total sales matters. “
In an announcement detailing the agreement, Elixinol said Health House’s wide reach in the Australian market was a particularly attractive quality.
By and large, the new deal has been described as a significant milestone for the ASX-listed healthcare company, which is already selling its hemp-derived CBD products in America, Europe and the UK.
The market is also growing in Australia: by March 2021, the TGA had approved over 100,000 patient applications for medical cannabis and these numbers are expected to continue to rise.
Paul Mavor, Health House’s Chief Operating Officer for Australasia, said, “Elixinol is one of the world’s largest CBD companies with a global presence. Health House looks forward to supporting its drug and hemp product offering in the Australian market. “
The distribution agreement will essentially start on July 12, 2021 and will run for two years. According to the standard procedure, either party can withdraw from the business with 90 days’ notice in writing.
Additionally, after signing with Health House, Elixinol has chosen to terminate its distribution agreement with PharmaCann Pty Ltd.
Under the previous agreement, PharmaCann sold Elixinol products to the Australian market under TGA’s Special Access Scheme. The deal was closed in late July 2020.
Given Health House’s extensive distribution network and access to specialists, Elixinol believes it is better positioned to pursue distribution opportunities in Australia under the Health House deal.
The ASX listener claims that any contributions from the PharmaCann agreement were not material to the company’s business.