Creso Pharma seals $2.5M cannabidiol distribution agreement
Creso Pharma Limited’s (ASX:CPH; FRA: 1X8) strong performance over the last three months - during which time its share price has surged more than 500% - may be set to continue with the negotiation of a comprehensive distribution agreement with a leading nutritional supplements company, Route2 Pharm Pvt Ltd (Route2).
The three year agreement is for minimum order quantities for the first contractual year of up to CHF1.71 million (AU$2.48 million) across the CannaQix 10, Cannaqix 50 and CannaDOL product lines, pro-rata subject to timing of product registrations.
Under the terms of theAgreement , Route 2 has exclusivity rights over Creso's cannaQIX® and cannaDOL product lines, subject to Route 2 achieving minimum order quantities for each product line in the first contractual year, being 1 January to 31 December.
First Contractual Year minimum order quantities are as follows:
This agreement will involve the importation, marketing and distribution of its innovative hemp-derived therapeutic products into Pakistan and other countries including the Philippines, further expanding Creso Pharma’s sales capacity.
Route2 is a subsidiary company of Route2Health (www.route2health.net).
Route2Health has over 30 years of pharmaceutical sciences experience and produces and distributes world-class herbal remedies and dietary supplements.
The group is based in Pakistan and has state-of-the-art manufacturing facilities and partnerships with other industry participants.
Another opportunity as regulatory changes open up new markets
The agreement follows a landmark decision made by the Pakistan government in September 2020, which will allow the country to enter into the billion-dollar cannabidiol (CBD) market, through a focus on cultivating cannabis and hemp for therapeutic products.
Route2 has a strategic association with Highnoon Laboratories Limited (PSX: HINOON), one of Pakistan’s most successful and progressive pharmaceutical companies.
As indicated below, shares in Highnoon have performed strongly since markets rebounded in March last year, increasing some 70%.
Under the agreement, both parties have agreed, subject to further regulatory approvals, to leverage their combined international reach to distribute and sell Creso’s products into additional markets.
Creso Pharma said that these include Afghanistan, Azerbaijan, Bangladesh, Cambodia, Georgia, the Maldives, Myanmar, the Philippines, Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.
This considerably broadens the company’s international footprint and unlocks a number of large market opportunities.
Targeting a population of 200 million in Pakistan
Pakistan has a population of over 200 million and a wide range of unmet needs that can be addressed by Creso’s targeted portfolio of products that includes cannabis and hemp-derived products, focusing on four key areas including therapeutics, nutraceuticals, animal health, and cosmetics.
Creso Pharma currently has a portfolio of 13 products, eight of which have been commercialised and are generating revenues, as well as a strong product development pipeline.
Discussing Creso Pharma’s extensive market opportunities, and more specifically the agreement with Route2Health, non-executive chairman Adam Blumenthal said, "This agreement takes Creso into markets with a combined population of over 750 million people.
"Our mission is to deliver access to affordable, high quality, broad-spectrum, GMP products for the betterment of people’s lives everywhere.
"We’re delighted to conclude this important partnership through which we hope to provide the opportunity for millions of people to have access to our innovative products.”
Managing director of Route2 Shahnawaz Baig discussed the groups’ shared goals saying, “We are very excited to progress this partnership with leading global cannabis company Creso Pharma.
"There exists a vast amount of real-world and strong clinical evidence that supports the safety and efficacy of hemp-based therapeutic products.
"The basis for this partnership is a shared commitment of bringing affordable, high quality products to market that improve people’s lives.
"We intend to fully leverage the financial and marketing strength of our group to deliver on this mission.”