Creso Pharma raises $17.5m to fast-track Canadian cannabis production
Health & Biotech
Health & Biotech
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Cannabis biotech Creso Pharma has completed a heavily over-subscribed $17.5 million capital raising to fast-track construction of its Canadian growing facility and pursue acquisitions.
An initial placement of $10 million was increased to $15.5 million after high demand from local and international institutional and professional investors.
A further $2 million will be offered to eligible shareholders.
Creso’s (ASX:CPH) shares have more than doubled in price since the start of November.
Cannabis is the hottest category on the ASX at the moment, propelled by a flurry of regulatory changes and news flow.
Stocks such as Creso with exposure to Canada’s booming cannabis market are doing particularly well.
Canada is already the world’s biggest market for medical cannabis (it was legalised in 2001) and will next year become the second country to legalise recreational use of the drug.
The Canada Marijuana Index — which tracks 18 leading Canadian cannabis stocks — is up more than 50 per cent since last month, when US alcohol giant Constellation Brands bought 10 per cent of Canada’s biggest medical marijuana supplier Canopy Growth for $C245 million ($253 million).
Earlier this year Creso acquired Canadian medical cannabis producer Mernova Medical. The newly raised funds will speed construction of a 1900 sq m growing facility and a state-of-the-art extraction facility.
“The support of institutional and sophisticated investors in this capital raising is a strong endorsement of our company,” said Creso Pharma CEO and Co-Founder, Dr Miri Halperin Wernli.
“It places Creso Pharma in a very strong position to accelerate the development of our cannabis growing facility in Canada and pursue merger and acquisition opportunities in order to expand the international distribution of our products and develop new ones.”
Creso is planning to have the new facility online with relevant licences when recreational cannabis use is legalised in Canada mid next year.
Creso will be one of the few companies globally — and the only ASX-listed medical cannabis producer — with 100 per cent ownership and the capacity to commercially cultivate and extract cannabis and hemp in the Canadian federally regulated environment.
“The ability to cultivate, extract and manufacture our own innovative cannabis and hemp products means we will have product for local distribution as well as export to countries which accept cannabis and hemp imports,” Dr Halperin Wernli said.
“Building our own ‘Good Manufacturing Practice’ cultivation facility also gives Creso the ability to rationalise and vertically integrate our supply and production chain.”
Good Manufacturing Practice is system for ensuring medical products meet quality standards.
Creso enters edibles market
Creso also announced today it was entering the fast-growing edibles market with a range of ultra-premium terpene-infused chocolate products.
Terpenes are essential oils (organic compounds) found in plants that carry flavour and aroma.
The terpenes in the new chocolate products will carry the characteristic odour and fragrance of cannabis with the same taste and feel — but will not contain THC or CBD or any other cannabinoids.
Creso partnered with Swiss chocolate-maker Aeschbach
Chocolatier (“Aeschbach”), to develop the premium chocolates range for global distribution.
Cannabinoid-based chronic pain lozenges
In May, Creso became the first company to import medicinal cannabis into Australia, and last week announced a major deal to import and distribute into Ausralia its cannabinoid-based chronic pain lozenges cannaQIX®50 in 2018.
Creso is developing hemp-based nutraceutical products for humans and animals, and launched in Switzerland anibidiol®1.25 and anibidiol®2.5 its first hemp-based complementary feed products for companion animals earlier this month.
anibidiol® is a natural complementary feed for companion animals containing a standardised amount of hemp extract with cannabidiol (CBD), the non-psychoactive substance of the hemp plant.
The product supports companion animals’ immune systems, natural defences and contributes to balanced behaviour.
anibidiol® is the first Swiss Agroscope conformed complementary feed for companion animals that contains natural hemp extract with CBD and is THC-free.
The use of hemp based products in animal stems from the similar physiology that humans and animals share – the endocannabinoid system which is a part of the nervous system and is involved in the regulation of a key physiological processes in all mammals.
Through this central role in almost all important processes in the body of humans and animals, the endocannabinoid system regulates, among other things, the sleep, the mood and pain sensations. It controls the memory and learning ability, the appetite and the body temperature, as well as inflammatory phenomena and the immune system.
This special report is brought to you by Creso Pharma.
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