The purchase order received by Creso Pharma from Red Light Holland marks an important first step towards the creation of the HighBrid Lab.

Global medicinal cannabis company, Creso Pharma (ASX:CPH), has landed its first sale in the Netherlands after securing a purchase order from Red Light Holland’s wholly-owned distribution company, SR Wholesale.

The purchase order is for Creso’s Swiss-manufactured cannaQIX CBD lozenges and cannaQIX hemp instant tea products, valued at CHF152,220, or around A$218k.

These hemp products will be sold under existing Red Light Holland brands including iMicrodose, and will be distributed across the Netherlands with additional orders anticipated over the coming months.

Today’s deal also marks the first purchase order between Red Light and Creso Pharma, and is an important step ahead of the creation of The HighBrid Lab.

As announced in June, The HighBrid Lab is a merger of Creso’s business with Ontario-based Red Light Holland.

The combined company is expected to have an implied pro forma equity value of C$347 million (around A$371 million), and is expected to be listed on the Canadian Securities Exchange under the ticker symbol TRIP.

 

‘Superior’ lozenge and tea products

Creso Pharma’s Swiss-manufactured products use innovative buccal formulations that enhance bioavailability of the active ingredients.

Each product has been developed following considerable capital expenditure and R&D undertaken by the company’s experienced management team in Switzerland.

According to Creso, its hemp tea products are based on full spectrum hemp plants and utilise innovative technology to optimise the hemp CBD content allowing for a superior product taste.

To ensure superior quality, Creso uses native tea instead of extracts allowing it to sell the product in countries where hemp tea is considered food, and where hemp extract is regulated.

This strategy will enable itself and Red Light to expand their market reach, Creso says.

With regards to market reach, Red Light’s SR Wholesale has a very strong market presence in the Netherlands, as well as an established distribution network of over 400 companies that sell CBD and other products across Europe.

This network includes a number of sub-distributors, which provide access to over 1,000 shops across the Netherlands, Spain, Germany, UK, France and Portugal.

Management believes that today’s deal will provide the opportunity for SR Wholesale customers to get a better understanding of its product offerings.

“Red Light Holland has a number of established brands in the Netherlands, which are well known and trusted by consumers,” says Creso Pharma’s non-executive chairman, Adam Blumenthal.

“To be able to white label our leading Swiss manufactured product suite through these has a number of competitive advantages, and the ability to considerably increase our sales,” he added.

 

The HighBrid Lab

Blumenthal anticipates that Creso’s products will be well received by consumers, with current and future sales to underpin Red Light’s growing revenue profile.

The deal also marks an important first step in the potential merger of Red Light and Creso Pharma to create The HighBrid Lab.

The combined company will focus on several key growth areas – including expanding the market and Red Light’s brand leadership in recreational psychedelics, while crossing over to the cannabis sector.

Through this merger, Creso will also seek to focus on adding Red Light’s existing iMicrodose product lines with ingredients including CBD, THC and functional mushrooms, as and where permitted to do so.

Red Light’s CEO, Todd Shapiro, said his company is a “true believer” in the quality of Creso’s carefully curated and innovative CBD products.

“SR Wholesale already sells CBD products to a variety of locations in the Netherlands, and thus we have the data to show that CBD remains popular as a product category,” he added.

Additionally, both companies have made the strategic decision to introduce both lozenge and tea products into the Netherlands market initially.

This decision follows ongoing product development initiatives between the two parties, where multiple innovative compound combinations and delivery methods were explored.

These delivery methods have been earmarked for the first potential combination products, with a progress update to be shared with shareholders in the near term.

“We will initially focus on both lozenge and tea delivery methods, and leverage their existing knowledge to our Swiss-based management, as well as Red Light’s extensive experience, to progress the introduction of these new products as quickly as possible,” Blumenthal said.

This article was developed in collaboration with Creso Pharma, a Stockhead advertiser at the time of publishing.

 This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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