CPH announces new deal with LeafCann to expand Australian offering

By Megan Graham. Published at May 11, 2017, in ASX Biotechs

Creso Pharma Limited (ASX:CPH) has signed a strategic agreement with pre-eminent Australian medicinal cannabis producer LeafCann Group Pty Ltd (LeafCann). LeafCann will supply GMP-standard cannabis and hemp-derived materials to Creso for use in its pharmaceutical-grade therapeutic products.

The agreement is designed to solidify Creso’s position as a leader in the growing Australian medicinal cannabis market, and accelerate the development and commercialization of locally manufactured medicinal cannabis products in Australia. A Letter of Intent (LOI) will see the two companies working together on future product development for both the human and animal health markets.

The LeafCann agreement follows Creso’s news last week that it had become the first Australian company to successfully import medicinal cannabis products into Australia under the new legislation. The company announced it had formalized an agreement with commercial partner Health House International, which successfully achieved the history-making import right at a time when the medicinal cannabis industry is picking up speed in Australia.

The partnership with LeafCann is set to strengthen Creso’s strategic position in the sector, and capitalize on the interest and growth in the domestic market prompted in large part by legislative changes at a state and federal level affecting the research, cultivation and production of medicinal cannabis.

It should be noted here that CPH is still an early stage company and investors should seek professional financial advice if considering this stock for their portfolio.

LeafCann is an Australian-based medicinal cannabis grower established by co-founders Chris Nasr and Elisabetta Faenza, both motivated by personal experiences with chronic illness and pain. Supported by the knowledge of Dr. Jaroslav Boublik, PhD (Med) as LeafCann group CEO and Visage investments financiers, LeafCann’s goal is to provide Australians safe and affordable access to the product.

LeafCann’s mission is to advance the re-introduction of cannabis in medicine and nutrition through conducting and supporting product research and development, clinical trials, commercial cultivation and GMP manufacturing. Through partnerships, it supports compassionate access, education and industry advice as the pre-eminent leader of the medicinal cannabis sector.

LeafCann is looking to start clinical trials and commence medicinal cannabis cultivation in the next 12 months.

“We are very excited to venture into the LOI with Creso,” LeafCann Co-Founder and Chief Strategic Officer Elisabetta Faenza said. “We have all of our ducks in a row, which is why Creso has been keen to partner with us and likewise us with them.

“Creso approached us because we have a good reputation in the sector as a patient-centred company. The outcome for the end user is crucially important for us. There are several companies out there riding the bubble... but not necessarily doing anything or developing products.

“So we’ve been going after partnerships to drive our demand while we are waiting on licenses, and we’ve been interested in people who are looking to do the hard yards, and get this happening in Australia as opposed to riding the bubble. We did a lot of due diligence with Creso and we really liked what we saw.”

Of the agreement, Creso’s Chief Operating Officer David Russell said: “We are delighted to have the opportunity to work with LeafCann, a pioneer of the Australian medicinal cannabis industry. The quality of supply that LeafCann will provide will help us manufacture products that meet international pharmaceutical standards.

“The depth of Pharmaceutical experience and expertise that Creso brings to the industry sets us apart from the competition, and we are uniquely placed to become a leader in the market and to help shape the development of the industry.”

Creso CEO and Co-founder Dr. Miri Halperin Wernli added, “Creso and LeafCann will work together with a focus on maintaining an innovative and truly pioneering spirit, from which new ideas can be translated into evidence-based therapeutic solutions.”

Staking out a strategic position in Australia and beyond

CPH has announced a string of strategic partnerships and agreements in recent months, as part of its broader plan to stay ahead of competition and capture maximum market share both in Australia and internationally.

At present, there is significant unmet need among Australians seeking to use these therapeutic products, and widespread concern regarding timely and affordable access. This is the gap CPH is hoping to fill, particularly at a time when the market is set to grow significantly as laws around the use of medicinal cannabis are relaxed.

Beyond its plans for Australia, CPH has made several recent moves towards penetrating other markets, such as South America.

In March, the company announced it had signed a binding LOI with Brazil-based market-access and distribution service company Sin Solution – a deal which will enable CPH to gain a strategic foothold in the vast Latin American market also.

The agreement stipulated that Sin Solution will assist Creso with the commercialization of its premium Swiss Vitamin nutraceuticals and its cannabinoid-derived nutraceutical products in Brazil, with sales targeting the privately insured middle class population of 60 million people with a potential market worth over $US800 million.

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