Creso Pharma shares spike as Democrats win improves prospects for US cannabis legalisation
Health & Biotech
Health & Biotech
Special Report: Creso Pharma’s (ASX:CPH) shares have surged after Democrats won control of the US Senate, boosting chances for federal marijuana reform in the world’s largest economy.
Shortly after the open CPH shares had gained 19.4 per cent to a three-week high of 21.5c, following Jon Ossoff and the Rev. Raphael Warnock winning runoff races in the US state of Georgia overnight.
Over the past two years, cannabis reform measures including the MORE Act have passed the House only to die in the Republican-controlled Senate, so Democratic control of both the legislative chambers paves the way for progress.
“Democratic leaders in the upper chamber — including Senators Schumer, Wyden, Booker, Merkley, Smith, Sanders and others — have already pledged publicly to debate and advance legislation to end federal marijuana prohibition via descheduling,” says Justin Strekal, political director of NORML, the National Organization for the Reform of Marijuana Laws.
“Senator Schumer’s ascension to Majority Leader will mark the first time in US history that the upper chamber is led by a Senator who is openly calling for cannabis legalization.”
Both senators-elect Warnock and Ossoff are on record supporting an end to federal marijuana reform, Strekal notes.
Passage of the MORE Act or a similar measure could be huge for Creso Pharma, which has a wholly owned subsidiary just 350km from the US border in Canada.
If cannabis is removed from Schedule 1 status of the Controlled Substances Act, Mernova Medicinal could quickly scale up operations at its state of the art 2,230-square-metre facility in Windsor, according to Creso.
The company also produces animal health and nutraceutical products from its business in Switzerland.
“Creso is very well positioned to capitalise on opportunities arising from the market in the USA, including expanding distribution of its existing cannabis products through the scale up (of) its operations in Canada and Switzerland,” Creso co-founder and director Boaz Wachtel said in December.
Mernova has already been finding enthusiastic buyers in the Canadian market for strains of its high-quality artisanal cannabis and last month announced it expects to shortly be selling into Canada’s biggest recreational market, Ontario.
The company’s managing director, Jack Yu, is a former cannabis grower with 16 years of experience working in the legal industry.
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.