Creso Pharma breaks into lucrative Israeli market, streaks past 2019 revenues
Health & Biotech
Health & Biotech
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Special Report: Creso Pharma has opened up a new distribution channel with the receipt of a large order from a leading medicinal cannabis company in Israel for its high quality strains of dried medicinal cannabis flower.
Creso Pharma’s (ASX:CPH) Canadian subsidiary Mernova Medicinal has received an order worth $C775,000 ($896,692) from Univo Pharmaceuticals for its premium, cured and hand-trimmed dried medicinal cannabis flower.
The company already has an extensive global network, but the new order further expands Creso Pharma’s geographical reach as well as diversifies its partnerships.
Importantly, Israel is a pioneer in the global medicinal cannabis market, which has been estimated to be worth $US62.7bn ($102.5bn) by 2024.
“Following the recent deal we closed in North America, it shows we are making significant inroads into new markets,” Creso Pharma CEO and co-founder Dr Miri Halperin Wernli said.
“Despite the challenges the world faces due to COVID-19, Creso Pharma remains on a strong trajectory for 2020.
“The order is the company’s first from Israel and we hope to expand on this initial order in the coming months. We also will continue to work hard to penetrate new markets as Mernova moves closer towards receiving EU GMP certification.”
Isaac Allen, vice president of Mernova, says Univo is a “world-class” partner with “significant connections to pharmacies and patients in Israel”.
Univo has licenses for the entire supply chain including cultivation, production, research and development, and distribution.
Creso Pharma understands that Univo intends to distribute the company’s product through Hiliz Ltd, an Israeli firm operating in the medicinal cannabis distribution sector.
Hiliz has direct connections to over 20 Israeli medicinal cannabis pharmacy dispensaries, which may allow the company’s product to be directly marketed and distributed to patients.
According to a recent white paper from the Israeli government, medicinal cannabis is currently supplied to more than 50,000 patients in Israel, with world-class research carried out with government approval and encouragement.
Adding to its potential, Israel’s medicinal cannabis market is flourishing alongside the global market which continues to grow rapidly.
In its November 2019 Global Cannabis Report, cannabis consultancy firm Prohibition Partners estimated that the global legal cannabis market would be worth $US103.9bn by 2024.
With medical cannabis legislation being enacted at a faster pace than recreational, Prohibition Partners believes that about $US62.7bn of that market will be for medicinal cannabis, which presents a significant opportunity to Creso Pharma and Mernova.
Under the deal with Univo, Mernova will ship two of its premium strains of cured, hand-trimmed, dried medicinal cannabis flower, to Israel.
Half of the order value will be paid in cash within 10 business days of the signing of the order, with the remaining 50 per cent to be paid in cash following delivery in Israel.
Delivery is expected to be completed within one month, subject to the grant of an export permit by Health Canada.
Nova Scotia-based Mernova is currently ramping up production and is in the process of securing its EU Good Manufacturing Practice (GMP) certification, which will allow it to begin sales of high-quality cannabis flower and extracts, into established and growing markets in Europe.
Last month, the company hired two top guns – two former executives of one of the world’s largest cannabis companies by market cap, Canopy Growth Corp (TSX:WEED, NYSE:CGC).
Mernova also received a $C410,000 purchase order in early March. That deal combined with this latest one has firmly placed the company ahead of its full-year 2019 revenues, which came in at $C761,000.
As Mernova looks to scale up production this year, the company is working to expand on this initial order to generate more reliable long-term sales streams.