Earlier this morning, the share price of Creso Pharma Limited [ASX:CPH] hit 41.5 cents per share.
At time of writing it is up 1.3%, trading at 39 cents.
Creso Pharma has been in a slide over the past 12 months:
The latest news out of the company is a crucial ‘license to cultivate’ approval for its facility in Nova Scotia.
Creso Pharma share price reacts to news
In an announcement released this morning, Creso Pharma hailed the achievement saying:
‘[We are] pleased to announce that [our] wholly owned subsidiary Mernova Medical Ltd (“Mernova Medical”), has been granted a license to cultivate by Health Canada, making it the only ASX-listed company that has a 100% ownership interest in a company that has a license to cultivate cannabis in Canada, and only the fifth licensed producer in Nova Scotia, Canada.’
Creso Pharma outlined its plans for expansion with some particular highlights related to the ‘state of the art’ facility:
- The facility has the potential to expand from 24,000 sqft to 200,000 sqft
- Potential to produce 4,000 kgs in its current state, and an expansion capability of 10-times this amount
- It has a supply agreement in place with TerrAscend Canada, a Licensed Producer to make its product
- The facility can store $100 million in concentrated product
- The company is the fifth licensed producer in Nova Scotia
John Griese, Creso Pharma’s North America Chief Operating Officer hailed the news:
‘We are excited to achieve this much anticipated milestone. The license makes Creso one of only a handful of companies with a license to produce cannabis in Atlantic Canada. It opens up substantial revenue opportunities given the high demand suppliers face following legalisation in Canada last year. Our strategy of locking in sales revenue ahead of granting of the license means we can hit the ground running and capitalise on the capabilities of this premium growing facility.’
You can see what the facility looks like below:
Source: Creso Pharma Limited
What’s next for Creso Pharma?
The strategy for Creso Pharma is potentially a two-step process.
Build revenue through its Canadian operations and reinvest that into their product pipeline.
Recently we have covered how Creso Pharma had entered into a strategic partnership with Burleigh Heads Cannabis to bring its cannaQIX®50 to market in Australia.
CannaQIX®50 is a pharmaceutical grade, CBD-based lozenge that also contains niacin, B vitamins and zinc. It is designed to dissolve in the mouth and is intended to support the management of chronic pain.
Going forward, investors will likely be waiting to see how their two ongoing negotiations proceed with regards to a spin out of its nutraceutical and CBD business into a new ASX-listed company, as well as an acquisition of a European-based health food business.
For Money Morning