Creso Pharma’s shares surge following news of Democratic majority in Senate
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) was among the myriad of cannabis stocks to surge on Thursday (07/01/2021) following early news from the United States that the Democrats had taken control of the Senate.
Following significant share price movement in response to developments in the US, CPH closed at a high of 26.5c, representing a gain of 44% in a mere 24 hours.
The Democratic win is likely to catalyse constructive changes for federal cannabis reform - 2021 will see the first unified Democratic control of the White House and Congress since 2008, whereby such leadership has revolutionised their cannabis policy and support for reform.
Throughout the election the Joe Biden campaign touted support for cannabis decriminalisation, with Kamala Harris pledging for it to be an administrative priority if she and Joe Biden were elected.
Importantly, the development enhances the potential for Marijuana Opportunity Reinvestment and Expungement (MORE) Act to be passed in the Senate, a bill which has the potential to considerably benefit Creso Pharma.
On December 4, Creso Pharma advised that the US House of Representatives passed the 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 Cannabis industry views these developments as a major milestone, 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.
Investors are now sitting tight to see if the coming months will open the door to a series of meaningful cannabis policy reforms.
Creso attractively poised to tackle US market
Creso Pharma is now 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 already has a 24,000 sq ft cannabis growing facility 220 miles from the US border. From its current position, Mernova could scale up operations to meet potential demand from the US market.
Creso is currently exploring several US market opportunities and is confident in its ability to enter this market swiftly. As a listed vehicle with access to capital, Creso is also an attractive partner for merger and acquisition opportunities.
CPH share price increase tenfold with global regulatory developments
Such triumph for Creso Pharma comes off the back of the strong rerating that occurred in December 2020, which saw company share price increase tenfold in the midst of promising global regulatory developments and purchase orders.
On December 2, the United Nations Commission of Narcotic Drugs voted to remove cannabis from Schedule IV of the 1961 drug convention treaty.
Under the United Nations system, Schedule IV substances are considered the most dangerous and addictive drugs. Cannabis has now changed to be classified Schedule I, the least restrictive drug classification, a landmark decision and in essence, acknowledgement of the potential medical properties of cannabis.
Commenting on the Democrat win, Non-Executive Chairman, Adam Blumenthal said: “The recent election result is a historic moment for the cannabis industry in the USA and these developments leave Creso very well placed to capitalise, should cannabis ultimately be decriminalised in the US through the passing of the MORE Act.
“Importantly, the decision reflects the changing sentiment towards cannabis and its CBD derived products in the USA. Creso has established distribution footprints in place, as well as an established product suite that it is able to quickly rolled out to satisfy large unmet demand from US customers.
Our proximity to the US, through our wholly-owned subsidiary Mernova, provides a significant advantage for the Company and we look forward to any potential legislative changes that will unlock the US market.”
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.