Aussie pot stock Creso Pharma Ltd [ASX:CPH] shares is on the up today.
The share price is currently trading 8% higher at time of writing. Climbing on the back of some positive news from one of Creso’s Canadian subsidiaries.
Let’s take a closer look…
New licence, new orders
Mernova, a wholly-owned subsidiary of Creso, has been granted approval for an extension of its cannabis sales licence. Giving the company the ability to sell medicinal products direct-to-patient without the need for a wholesaler.
This win is a big milestone for Mernova and Creso, opening the business up to the medicinal market for the first time.
On top of this, Mernova has secured some new purchase orders. Sales that not only testify to the quality of its product, but also the demand — with $242,546 worth of recent purchase orders according to Creso’s update.
And with ongoing product development still underway, these figures may just be the start of a broader trend. Particularly as Mernova devises its strategy for both medicinal and recreational customers.
Mernova’s managing director, Jack Yu, says:
‘Mernova is well positioned to expand its presence in the Canadian medicinal market, while continuing to increase market share in the country’s growing recreational market. The direct-to-patient medicinal market has the potential to be huge for us. It increases our distribution channels from four provinces and territories to nation-wide, and allows for direct-to-patient sales, which provides us with increased control over pricing, as well as direct interaction with, and feedback from, valued customers.
‘We anticipate this licence expansion to allow us to considerably grow our revenue profile and profit margins, and that the potential of a recurring revenue model for medicinal sales may also provide increased predictability and stability of cashflows, forecasts, and downstream supply chain management. Planning for our direct-to-patient medicinal launch is underway, and we look forward to supplying our top-quality product to patients, nation-wide.’
What’s next for the Creso Share Price?
Today’s development is a welcome one for investors. A clear sign that they’re buying into the growth and progress that Creso is making in the Canadian market.
With further ventures and plans in the North American nation, this is not the company’s only focus. Management has plenty of juggling to do between different interests.
For investors, it will be telling to see where Creso decides to devote most of its attention. Because with operations across recreational and medicinal cannabis, as well as psychedelics like psilocybin, the company may be biting off more than it can chew.
But if it succeeds Creso may just carve out a piece of three huge sectors in this emerging market. Time will tell…
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For Money Morning
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