Creso to tap emerging Canadian medicinal cannabis market

By Zoe Gross. Published at Oct 27, 2017, in ASX Biotechs

Leading medicinal cannabis player, Creso Pharma Limited (ASX:CPH), today updated the market with a cluster of encouraging developments.

CPH has successfully completed due diligence for the Mernova Medicinal Inc. acquisition, a 20,000 square foot medical cannabis growing facility in Nova Scotia, Canada.

This development is tightly aligned with a shifting legislative climate – and subsequently emerging market – in Canada.

CPH has also advised that the application for a medical cannabis cultivation licence under Health Canada’s Access to Cannabis for Medical Purposes Regulation (ACMPR) program is progressing.

This will give CPH a considerable competitive advantage as the only ASX-listed medicinal cannabis company with 100% ownership and capacity to cultivate, extract and manufacture its own innovative cannabis and hemp-derived human and animal therapeutic products in Canada – not to mention one of the few such companies globally.

These products will be available for local distribution, as well as export to countries which accept cannabis and hemp imports.

Market penetration is yet to be seen so investors should seek professional financial advice for further information if considering this stock for their portfolio.

CPH has also announced that a construction contract has been signed with Avondale Construction Ltd, and completion of the new production facility is strategically targeted to coincide with the July 2018 legalisation of recreational cannabis in Canada.

Once completed, the 20,000 square foot facility is expected to produce 2,000-4,000 kilograms of cannabis per year.

CPH and Mernova have also agreed to exercise the right of first refusal option on the adjoining land parcel, allowing Mernova in time to expand the facility to up to 200,000 square feet. The total land purchased is 9.75 acres.

The current facility will be built in a way that is scalable and which can grow alongside demand with the emergence of the recreational market.

The facility is currently being built and will be operated to GACP and GPP (GMP) standards, ensuring it can expand research and development capability for CPH.

Also highly promising is that Canada is amending the Cannabis Act. Bill C-45 to allow sale of edible medicinal cannabis products in 2019.

This opens a fertile market for CPH’s cannaQIX® and cannapeal® product ranges. These are hemp-based nutraceutical products created using proprietary innovative delivery technologies. These have been authorised to market, with Free Sales Certificates for global export in full compliance with Federal Swiss Food Laws and Regulations.

The introduction of these product ranges into the anxiety and stress treatment space is backed by strong scientific rationale.

The Canadian market is clearly flourishing. As of June, over 200,000 patients are now registered for medicinal cannabis in Canada (as opposed to last year’s 75,000).

The Canadian government intends to bring the proposed Cannabis Act into force no later than July 2018.

Nova Scotia has opened public consultation so it can take responsibility for developing, implementing, maintaining and enforcing systems to oversee the distribution and retail sale of cannabis, in close collaboration with municipalities.

The proposed Cannabis Act will allow Nova Scotia to license and oversee the distribution and sale of cannabis, subject to federal conditions.

CPH and Mernova join 16 other licenced producers to develop guidelines relating to how the drug should be branded and promoted before its recreational use becomes legal next year. These industry leaders have enlisted the help of Advertising Standards Canada. Interestingly, the guidelines developed here could serve as a baseline for the government’s consultations.

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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