Bod Science has reported a steep decline in sales of its MediCabilis CBD product range during the first half of FY23, with the company pointing to surging consumer demand for THC flower as the primary cause.
Medicinal cannabis revenue dropped 29% to A$578,000 over the July-to-December period, with unit sales falling by 37%.
Despite the weak figures, Bod said it was maintaining its position in the CBD market and was "reviewing opportunities to grow the total addressable market", including plans for a CBG product launch in Australia.
CBD and hemp product sales to global partner Health & Happiness also fell sharply, declining 59% to $279,000, while non-CBD health and beauty revenue dropped 26% to $242,000.
Bod attributed the Health & Happiness decline to European cannabis reform progressing more slowly than anticipated.
Total revenue for the half-year period fell 28% to $2.48m — which included a R&D tax rebate of $1.35m — resulting in a loss of $3.17m, a 46% increase on the first half of FY22.
The wider loss sent shares down nearly 11% in Friday trading, with the stock closing at $0.065c.
Bod linked the growing deficit to a $648,000 increase in R&D expenditure tied to its schedule 3 trial and ongoing investment in its recent acquisition, Aqua Phase.
At the close of the period, the company held nearly $3.9m in cash and equivalents, which it said gave it "significant financial flexibility to progress its clinical trial initiatives and international expansion opportunities across its medicinal cannabis and CBD and wellness product suite".
Bod managing director Jo Patterson has previously spoken about the "enormous potential" of Aqua Phase, a UK-developed technology designed to enhance the therapeutic effectiveness of CBD through an improved delivery mechanism.
"Most CBD oil is suspended in MCT oil and the scientific literature says the absorption is between 6% and 8%. We think that Aqua Phase, at a minimum, is going to be greater than 30%," she said last year.
In its H1 FY23 presentation, Bod outlined plans to deploy the technology as a delivery mechanism across its existing and future CBD drinks and medicinal cannabis products, "as well as having the potential to generate revenue from licensing the technology".
Should the technology reach commercial viability, the company expects finished products to be available in a range of formats, including bulk powders, capsules, creams, fast dissolves, and concentrates.
