Positive regulatory ramifications for CPH from US Marijuana Act
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
Creso Pharma Limited (ASX:CPH; FRA: 1X8) has advised that the US House of Representatives has passed the Marijuana Opportunity Reinvestment and Expungement (MORE) Act to remove cannabis for the US Controlled Substances Act.
The historic bill aims to erase certain federal convictions and essentially decriminalise cannabis for the first time on a national level.
The bill was passed in the lower chamber with 228 votes to 164 votes on Friday 4 December 2020 and will now move to the Senate.
This is a major milestone for the cannabis industry as legislation like the MORE Act is expected to encourage private investors and larger corporate entities that have been hesitant to become involved in the US cannabis industry due to federal prohibition.
The development leaves Creso Pharma very well positioned to capitalise on opportunities in the US market.
The company has an established global distribution network that will benefit from the ruling, as well as a leading Canadian subsidiary, Mernova Medicinal Inc. (Mernova) that can scale up operations to meet potential demand from the US market.
Mernova, which is Creso’s fully licenced 24,000 square foot cultivation growing facility is only 1700 miles from the US border, an ideal location to be able to cater to the Canadian and US market.
Having such close proximity to the US, Mernova will immediately benefit directly upon legalisation.
There is also substantial appetite for the group’s Swiss CBD products in the US, and management is exploring many initiatives to roll this out as soon as legalisation occurs.
There has been some extremely positive industry data released throughout the year, and the following chart indicates that the American marijuana business could increase to US$130 billion by 2024.
Creso’s shares surge following positive global regulatory developments
Creso co-founder and Director Boaz Wachtel highlighted the significance of this development, particularly on the back of last week’s news regarding regulatory shifts in the European Union in saying, “This is a historic ruling that will create significant growth opportunities in our burgeoning industry. It follows similar regulatory shifts in the European Union and from the United Nations that highlight public acceptance for cannabis and CBD-derived products is at an all-time high.
“Creso is very well positioned to capitalise on opportunities arising from the market in the USA.
“The company has a robust balance sheet, allowing it to progress near and medium term growth initiatives, as well as an established Canadian subsidiary in Mernova, which can be scaled up to address the US market.
“The appointment of Canopy Growth founder, Bruce Linton to Creso earlier this year will position Creso very strongly to take advantage of this new opportunity when it materialises.”
Such has been the quality of the newsflow that shares in Creso Pharma have increased more than threefold in less than a fortnight, and they are now trading at levels not seen since COVID sent our market tumbling at the start of the year.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.