Creso Pharma updates market on Colombian medical cannabis acquisition

Published at Apr 9, 2018, in ASX Biotechs

Creso Pharma (ASX:CPH) has informed the market that it has extended the heads of agreement for its proposed acquisition of Colombian medical cannabis group, Kunna S.A.S., and its parent company, Kunna Canada, from 30 April to 31 May.

The extension enables Creso to continue to make steady and satisfactory progress toward completing due diligence in the foreseeable future and satisfying the conditions precedent under the HOA with Kunna S.A.S.

This strategic acquisition will give CPH a considerable foothold in the salient Latin American market. Significantly, it will also make CPH the only ASX-listed medicinal cannabis company with direct exposure to the Colombian market, and with the capacity to commercially cultivate medicinal-grade cannabis in the country.

Colombia is one of Latin America’s rapid-growth marijuana markets. Colombians spent $US86.3 million on cannabis in 2008, and consumption has grown at 15 per cent per year.

It is projected that by 2019, Colombia will contribute over 40.5 tonnes of cannabis derived oil to the buzzing global medicinal cannabis market.

However, the size of the market share Creso can secure remains to be seen at this stage, so if considering this stock for your portfolio, do your own research and seek professional financial advice.

More on Kunna

Kunna plans to develop phytotherapeutic products with a view to treating seizures, chronic pain, cancer, epilepsy, multiple sclerosis and other medical conditions.

In March last year, Kunna was granted a licence to produce, manufacture, market and export cannabis derivatives and products using extracts in Colombia by the Ministry of Health — making it one of only a small number of companies to have clinched such a licence.

Following this, Kunna applied for a licence to cultivate medicinal cannabis in Colombia, which it expects to be granted this month. In preparation for this, Kunna has laid out a research project which investigates plant genetics, disease and optimising cultivation.

Kunna has also identified a parcel of land ideally suited to medicinal cannabis cultivation. Once it receives its cultivation licence, it will immediately kick off a fully-fledged genetic and fertilisation project to obtain the optimal scalable crop for the premise selected.

It will then also progress stage two of its project development, which will substantially expand its land package and production of medicinal cannabis. Stage three, meanwhile, has potential to bring the company up to 600 hectares of cultivation property, subject to Colombian ministry quota grants.

Kunna is leveraging local resources and research, combined with access to vast cultivation property, to emerge as one of the lowest cost producers in the industry.

S3 Consortium Pty Ltd (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 only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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