With a new Republican-led bill to be introduced in Congress legalising cannabis use in the US, Creso Pharma is well positioned to take advantage of any uptick in demand. 

Australian medicinal cannabis company, Creso Pharma (ASX:CPH) is positioning to capitalise on the federal legalisation of cannabis in the United States with its increasing North American presence.

The legalisation of cannabis in the US has been boosted with a new Republican-led bill to legalise and tax cannabis soon to be introduced in Congress as an alternative to Democratic leaders’ marijuana legislation.

The House Veterans’ Affairs Committee has already approved a bill requiring the Department of Veterans Affairs to conduct clinical trials on the medical benefits of marijuana for military veterans with PTSD and chronic pain.

A ‘National Defence Authorization Act amendment’ has been filed that would federally legalise medical marijuana for military veterans. The amendment would also enable Department of Veterans Affairs doctors to issue cannabis recommendations and require the department to research marijuana’s therapeutic potential to reduce pain and opioid misuse.

While federal politicians who ran in 2020 promised reforms, the process has taken longer than anticipated. The use and possession of cannabis remains illegal under federal law for any purpose in the US. However, policies regarding medicinal and recreational use of cannabis vary greatly among different states with many in conflict with federal law.


Creso to capitalise on strong North American presence

Creso has been steadily growing its North American operations and presence since it was first established in Australia in 2015.

Creso recently acquired Canadian company ImpACTIVE, whose assets include CBD-based products that provide anti-inflammatory relief to professional and amateur athletes suffering from chronic muscle and joint pain.

The company is making further traction in Canada following substantial new purchase orders secured by its wholly-owned subsidiary, Mernova. The purchase orders were for a combination of Mernova’s top-quality indoor grown, hand trimmed, hang dried, cured, artisanal, and craft cannabis products.

The total value is C$742,572 (or around $808k) and includes a bulk order for the Lemon Haze and Mimosa strains valued at C$185,742 (around $202k).

In July, Creso completed its acquisition of Canadian-based Halucenex, a clinical stage company focused on using psilocybin to treat PSTD, TRD and anxiety. In a major step towards a Phase II clinical trial Halucenex has just received favourable results from stability testing for its GMP grade psilocybin.

Creso Pharma’s team of board members and advisors are highly experienced in the sector, including Bruce Linton who led Canadian-based Canopy Growth from startup to a US$17bn company during his six-year tenure.  Creso founder Dr Miri Halperin Wernli is also a director of MindMed.

The company has reported strong financials with revenue growth for the last reporting period up 98%, largely driven by Mernova, which has seen revenues increase ~519%.


Creso a standout stock as investors bullish on rising cannabis sector

As the cannabis industry continues to gain momentum globally both investors and executives are bullish on the sector and its future opportunities for solid returns.

Boutique corporate advisory firm EverBlu Capital analyst Justin To has flagged Creso as a standout for investors to watch with its share prices rising on the back of a number of positive announcements.

To believes Creso is well positioned to take advantage of any federal legislative changes in the US.

“The introduction of the bill to congress marks a positive step towards federal legalisation of cannabis in the United States, which positions Creso well to leverage ImpACTIVE’s market position in North America, and imminent expansion of Creso’s wholly owned subsidiary Mernova into the United States,” To said.

Creso Pharma co-founder and non-executive chairman Adam Blumenthal said the company was now well positioned to become a market leader in the supply of legalised cannabis in the US.

“We have a strong operation and presence in North America which we continue to build on,” he said.

“We believe Creso is well placed to take advantage of any favourable regulatory changes in the US and an associated forecasted strong increase demand in cannabis products.”

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.