Creso Pharma signs first letter of intent for import and sale of cannabis products in Australia
Published on: | by Trevor Hoey
Creso Pharma (ASX: CPH) has announced that it has expanded its Australian presence, signing its first Australian letter of intent with Western Australian-based pharmacy, Health House International, for the import and sale of cannabis products in the Australian market.
CPH has established itself as a leader in cannabidiol (CBD) innovation and the group develops cannabis and hemp derived therapeutic grade CBD nutraceuticals and medical cannabis products with wide patient reach for human and animal health.
Consequently, this agreement is a significant development for the company as it opens up an additional revenue stream and expands its presence in a familiar market where there is political support for the use of cannabis related products in treating medical conditions.
Further demonstrates the benefits of CPH’s vertically integrated model
Under the terms of the letter of intent, Health House International will initially conduct a trial importation of cannabis oil products from Canadian-based third-parties introduced by Creso.
Following success of the trial in accordance with all Australian Laws and regulations, the parties have agreed to enter into an agreement for an initial two-year term (with an option of extension), subject to Health House International purchasing and importing the agreed minimum quantities of product. Creso will act as the facilitator for the import of the products into Australia and earn a facilitation fee on each Health House International import.
Once imported, Health House International will look to distribute products to Australian patients that can buy medical cannabis under the new Australian laws via its West Australian-based pharmacy and through the regulated national distribution chains.
Health House International will also look to supply products to patients enrolled in clinical trial programs initiated by Medical Cannabis Research Australia or other research institutions.
Government support augurs well for the future
CPH has been quick to respond to this new market opportunity as the legalisation of medical cannabis by the Federal Government in Australia was only ratified last year.
However, CPH is still in its early stages and investors should seek professional financial advice if considering this stock for their portfolio.
The move follows the legalisation of medical cannabis by the Federal Government in Australia last year and a supportive statement by the Prime Minister to initiate Medical Cannabis imports alongside building the local Medical Cannabis industry.
Under the federal scheme, patients with a valid prescription can possess and use medicinal cannabis products provided the supply has been authorised under the Therapeutic Goods Act and relevant state and territory legislation. The changes put medical cannabis in the same category as restricted medicinal drugs such as morphine.
The Australian medical cannabis market represents an attractive opportunity for Creso.
Creso Pharma Chairman and Co-Founder Boaz Wachtel said, “We look forward to working with Health House International to supply these Cannabis oils products for human health.”
Health House International Director and Perth based pharmacist Paul Mavor said, “We are excited to be working with Creso and importing some of the first sophisticated Medical Cannabis products into Australia at a time when cannabis based medicine is being researched for a few conditions where there are no other treatment options”.