Rich Lister’s medical marijuana dreams go up in smoke

On the outskirts of Melbourne, where the city’s suburban fringe stretches into market gardens and then on to bush, lies what remains of the dreams of one of Australia’s richest men.

There on a shady lane in Officer, surrounded by bucolic scenes of leafy gums, weeping willows and the odd Hereford cow, are empty greenhouse sheds that once held a crop of cannabis plants owned by medicinal marijuana group OneLife Labs.

The driveway of the sedate property in Officer that once housed the medicinal marijuana dreams of Rich Lister Russell ‘Ty’ Wilson. Credit: Justin McManus

Backed by Melbourne cryptocurrency billionaire Russell “Ty” Wilson, OneLife Labs, and its related group OneLife Cultivation, had until last month grand aspirations of becoming a major supplier of oils and other cannabis products for the medicinal marijuana industry.

But OneLife and its related subsidiary OneLife Cultivation collapsed into administration in December, owing its creditors $18.5 million, including its wealthy shareholders, who tipped in more than $11 million over three years to try to keep the group afloat.

At the time of its collapse, OneLife Labs had more than $1 million of “stock” in the form of marijuana, according to the administrator’s report. When The Age visited the Officer property rented by the group last week, there were no plants visible in the greenhouses, but buds, flowers or oils could be stored elsewhere or at the group’s processing facility in Wonthaggi.

Russell “Ty” Wilson and wife Kellie Wilson.Credit: Facebook

Sadly for its investors, OneLife’s stock is destined for destruction by the Office of Drug Control if the business enters liquidation and a buyer cannot be found for it.

The collapse of OneLife demonstrates how hard it is to run a medical marijuana company in Australia, where, despite the low barriers to obtaining a cultivation licence, the sector is challenged by high costs and is still very much a cottage industry.

For Wilson, it’s a rare business failure. He built a fortune of $2 billion from his family’s 80 per cent stake in internationally successful cryptocurrency exchange CoinSpot, a group that is perhaps best known in Victoria as the main sponsor for the AFL’s Western Bulldogs.

Wilson – a former Officeworks IT manager and huge Liverpool FC fan who lives in a sprawling mansion with tennis court and pool on the outskirts of Berwick – has kept a low profile despite his growing wealth thanks to CoinSpot, whose investors, including the Wilson family, have been paid $700 million in dividends in the past three years.

The greenhouses set up on the Officer property where bountiful crops of medicinal marijuana were grown. Credit: Justin McManus

According to OneLife’s company records, Wilson joined the board of the two OneLife operational companies in October 2022 alongside another CoinSpot investor, wealthy Melburnian Claude Huber, and the chief executive of ASX-listed medicinal marijuana group Wellnex, George Karafotias. The three men resigned from the operational companies in August, leaving company founder Andrew Grant as the sole director.

Wilson, along with Grant, was also a director of the OneLife companies’ ultimate shareholder, OneLife Botanicals, until May. That group is not in administration.

Wilson became a backer of the business through its purchase of a marijuana processing facility in Wonthaggi for $7 million from Toronto-listed major medicinal marijuana group MediPharm Labs.

Yet that acquisition did not yield the bounty the business had hoped for – soon after the acquisition, MediPharm directed its customers to new facilities, leading to the work at the Wonthaggi facility withering considerably.

It wasn’t the only trouble for the ambitious new business, according to director Andrew Grant, who laid bare the group’s difficulties in a statement to creditors that was included in the administrators’ January 9 report.

As Grant explained: “The nature of the cannabis industry is highly regulated in compliance and reporting to the three regulators. This requires a significantly skilled workforce, and consequently the business employed over 30 staff and had wage and salary expenses of $3.1 million per annum.

“With this level of necessary costs to retain licences, the business needs turnover of $12 million per annum to break even. This is estimated to be one-third of the laboratory production capacity.

“Due to the high level of regulations and high labour costs, there is an extended period before break-even can be achieved. Whilst the industry is growing, the ability to win customers was slower than anticipated and therefore losses were bigger than anticipated and accumulating.”

Wilson is a former IT manager at Officeworks and lives with his wife Kellie in a sprawling home on the outskirts of Berwick.

The group also spent large sums renting the Officer property from Grant, who noted that attempts to cultivate cannabis plants on the property had also proven uncommercial.

OneLife would have also faced additional costs in ensuring the Officer property had the appropriate infrastructure, according to Grant’s statement. This would have included a significant security upgrade at the property, which has no gate on its driveway and older fencing that could be easily breached by a member of the public.

Under Australian regulations, cultivators must file a security plan with the federal government as part of the conditions for holding a cultivation licence.

Administrator Gideon Rathner of advisory firm Lowe Lippmann told creditors there was still hope the business could be sold to a new buyer, thus avoiding a liquidation of the business and the destruction of its stock. Rathner told creditors in his January 9 report that discussions were advanced with three parties that had expressed an interest in the company or its assets, after first fielding 10 offers.

Wilson, Grant and Karafotias did not respond to inquiries. Huber could not be reached. Rathner declined to comment.

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