Bod's healthy revenues make it one happy cannabis company
Whilst some cannabis stocks can trade on hype and future earnings potential, Bod Australia (ASX: BDA) has much more than that going for it.
BDA has a growing revenue base, an impressive founder/CEO with a large shareholding, a deep pocketed global distribution partner in Health & Happiness Group (H&H), the parent company of Swisse, and it is riding the wave of favourable regulatory change.
The cannabis industry has been undergoing a transformation of sorts over the last six months.
In Australia, the Therapeutic Goods Administration (TGA) announced a decision to down schedule CBD products to Schedule 3 (Pharmacist Only) medicines.
The United Nations Commission on Narcotic Drugs accepted a recommendation from the World Health Organisation to remove cannabis and its derivatives from Schedule IV of the Single Convention on Narcotic Drugs.
Finally, the US House of Representatives passed the Marijuana Opportunity Reinvestment and Expungement ("MORE") Act to decriminalise cannabis at a national level. The bill aims to remove cannabis from the US controlled substance act, while recognising the therapeutic benefits of the drug.
BDA and its partner H&H have rolled out several therapeutic and medicinal hemp and cannabis products across global markets.
Strong product uptake
BDA has two distinct verticals: Medical Cannabis and CBD and Hemp Consumer products.
Through its partnership with H&H Group, BDA has released nine hemp seed products under the Swisse brand, which are sold in over 2,000 outlets across the globe.
A further four Swisse CBD products were launched in the Netherlands, representing the third major market that BDA and H&H have entered collaboratively.
In Australia, BDA products sold under the Swisse partnership, can be found at Chemist Warehouse, Coles and Priceline pharmacies.
BDA now has the largest market share (57 per cent) in the Australian addressable market for full plant, high CBD content products.
BDA products are also sold in the UK, Netherlands, and Italy, with further expansion in Europe and the US to come, as a result of the H&H partnership.
BDA and H&H will launch products in over 4,000 pharmacies across Italy and through Swisse's established e-commerce channels and has a binding purchase order from H&H valued at $200,000 for Swisse hemp seed oil products to be sold in France, as well as existing Netherlands and UK channels.
These products target specific need status including stress, sleep, energy levels and general wellness.
On the medical cannabis side, CBII marked H&H's first ever use of BDA's CBD in its product range and directly underpins sales growth through an innovative direct to consumer model.
Further to this, during H1 FY21, BDA filled a total of 3,941 MediCabilis prescriptions, highlighting a 114 per cent increase on the previous corresponding year.
Strong patient and physician product satisfaction is reflected by repeat prescriptions accounting for 62 per cent of sales volume and demonstrates the benefits that MediCabilis continues to deliver to patients suffering from a range of chronic conditions, which account for 74 per cent of prescriptions.
New markets and further expansion
The US looks to be the next market BDA is set to crack.
In 2020, BDA's CBD and hemp oil preparation received a self-affirmed Generally Recognised as Safe (GRAS) registration concluding it safe for use in specified food products in accordance with the stringent FDA safety guidelines.
What this means is that BDA's CBD and hemp range is considered safe for use in a wide range of food supplement and beverage applications.
H&H has an established presence in the USA and BDA expects to generate significant revenue from sales of its products in the US market.
The company will launch products directly to consumers through e-commerce platforms as well as with recognised retailers.
Growing revenues equate to a positive outlook for BDA
H&H provides BDA with an established global network that has had a highly positive impact on sales and revenues.
In fact, growth was underpinned by the sale of innovative CBD and hemp products to H&H.
Sales to H&H attributed $1.4 million to revenue, marking a 1,040 per cent increase and highlights the strong consumer demand for BDA and H&H's innovative product ranges in Australia, the European Union and the UK.
BDA reported a total revenue for the half of $3.3 million, marking a 62 per cent increase on the previous corresponding period.
Good business acumen has also led to reduced ordinary losses from activities by 8.4 per cent to $1.2 million, driven by a decreased spend on marketing costs and corporate overheads, despite the appointment of new employees in Australia, the UK and the US.
Alongside Australian growth, prescription growth is expected to continue with a well-established and increasing UK footprint.
BDA has entered into an agreement with leading medicinal cannabis services provider and distribution company, LYPHE Group, which saw LYPHE become BDA's preferred dispenser for Project Twenty21, Europe's largest medicinal cannabis registry.
The agreement provides Bod with an established footprint in the UK, strong distribution channels and a network of physicians to fill prescription volumes generated from Project Twenty21.
BDA is also exploring additional opportunities to broaden its operations in the UK.
BDA and H&H will launch products in over 4,000 pharmacies across Italy and through Swisse's established ecommerce channels.
The company also has a binding purchase order from H&H valued at $200,000 for Swisse hemp seed oil products designed to target specific need status including stress, sleep, energy levels and general wellness to be sold in France, as well as existing Netherlands and UK channels.
Entry into the US market, could present several further revenue generating opportunities.
This article is sponsored content in partnership with Bod Australioa. Business News Australia does not give financial advice.