Tuesday, 13 October 2020 15:07

Canopy Growth Founder Joins Creso Pharma As It Clocks $2M In Purchase Orders YTD

VENDOR NEWS: Though it has had its issues over the past 12 months following the failed A$122M acquisition by TSX listed cannabis company PhamaCielo, Creso Pharma (ASX: CPH) may be turning the corner.

After completing a A$8.992M funding round priced at $0.0291 per share, CPH is largely debt free and appears to be generating more consistent revenue via its Canadian cannabis cultivation facility – Mernova Medical Inc.

The company has also substantially trimmed its operating costs and brought on high-profile medical cannabis expert, Bruce Linton as a strategic advisor.

Linton was Canopy Growth Corporation’s (NYSE: CGC) founder and CEO and took Canopy from market minnow to a peak market capitalisation of approximately US$15 billion.

As chairman and chief executive Linton secured market support for 16 rounds of financing, totalling more than US$5 billion in capital raises and oversaw upwards of US$3 Billion in 30 merger and acquisition transactions.

He has extensive sector experience and holds multiple positions with international companies.

Linton has also worked with large financial institutions including the World Bank and the depth of industry experience he brings to the company will be invaluable at a time when CPH is on the verge of rapid growth.

Discussing the appointment of Linton and the company’s broader growth outlook, Creso Director Miri Halperin Wernli said, “Bruce brings a wealth of invaluable knowledge and a deep network of cannabis industry contacts to Creso Pharma and we anticipate that his appointment will greatly assist us in achieving our near-term operational milestones and longer-term goals.

“We continue to target international distribution agreements in a number of new markets and progress product development initiatives that will unlock considerable shareholder value.”

Linton would be pleased with Creso’s progress of late, including its ability to multiply purchase orders.

Creso’s repeat purchase orders now total more than $2 million on a year-to-date basis and just this week, the company once again strengthened its revenue profile with another repeat purchase order from South African-based Pharma Dynamics.

This is the second purchase order from Pharma Dynamics for CPH’s cannaQIX® product – sold under the ‘Cannamics’ brand and follows the successful product launch into the South African market in March 2020.

Pharma Dynamics will distribute Creso Pharma’s hemp-based products across South Africa, with plans to extend the distribution to Namibia, Botswana, Zimbabwe, Swaziland, Lesotho, Angola, Mozambique and Uganda.

Non-Executive Chairman Mr Adam Blumenthal said of the deal, “Securing this latest purchase order with Pharma Dynamics is a significant development and highlights the multiple opportunities we are witnessing in the region. Creso Pharma is beginning to see a trend in repeat orders from its clients globally which reinforces Creso’s high-quality products.”

Pharma Dynamics, a subsidiary of the $472.3BN capped Lupin Limited (NSE: LUPIN), currently ranks as the third fastest-growing pharmaceutical company in South Africa, and leads the country in their supply of high-quality generics set at affordable prices.

Pharma Dynamics is well known for investments into innovative wellness programs towards holistic healthcare, with a growing range of over-the-counter products including cold and flu, allergy and immune booster products. Their products are consistently prescribed and recommended by leading doctors and pharmacists countrywide.

This successful partnership is yet another win for Creso Pharma, which as stated has received over $2M in purchase orders year-to-date. 

Central to this growth has been their 100% ownership of Mernova Medical Inc. located in Nova Scotia, Canada – owner of a 24,000 square foot world-class, cannabis growing, revenue-generating, Cultivation and Production Facility.

Mernova, is key to Creso Pharma’s market expansion, with part of the funds from their $8.92 million backing from institutional, professional and sophisticated investors having been earmarked for such initiatives.

Mernova Medicinal received its initial purchase order from Nova Scotia Liquor Corporation (NSLC) for the purchase of two of the group’s premium strains, HPG 13 and Lemon Haze.

The initial purchase order from Nova Scotia’s sole distributor of recreational cannabis had a value of C$180,000 (A$189,000), and the second purchase order had a value of circa $253,000. These orders from Nova Scotia display broad significance as they signalled the group’s entry into Canada’s retail markets, further diversifying Mernova’s revenue streams and adding to their growing wholesale product sales pipeline.

CPH’s growing revenue profile and international growth initiatives are further emphasised by Blumenthal: “The demand for our product on a global scale vindicates the market share initiatives we have put in place, and the recent sales in Africa and Canada shows that this strategy is not only growing the Company’s footprint but also generating significant revenue. We look forward to further capitalising on these opportunities in the near-term.”

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