Big news out of the US today with President Joe Biden announcing plans to pardon all federal offenses of cannabis possession in the USA – highlighting the first significant step towards decriminalisation.

The announcement also marks initial steps towards the potential shift to reclassify cannabis on a federal level, and for pot stocks like Creso Pharma’s (ASX:CPH) – who have a lot of skin in the US game – this could be a real boost for operations in North America.

“While decriminalisation at a federal level may take some time, Creso Pharma has been building a very strong foundation to capitalise on the potential US market,” CEO and MD William Lay said.

“We plan to leverage our existing business divisions in Sierra Sage Herbs and Mernova to capitalise on the opportunity and are actively assessing a number of M&A opportunities in the country to cement a broader footprint.

“Further, we anticipate that any positive legislative change will provide the catalyst for major US institutions to increase exposure to the sector.”


Reclassification a potential investment catalyst

As part of the development, President Biden has also encouraged governors to advance steps to pardon possession charges at a state level and will task the Department of Health and Human Services and Attorney General Merrick Garland to expeditiously review how cannabis is scheduled under federal law.

Creso is confident that the federal reclassification of cannabis in the US could have major positive impacts on its North American operations – and could provide increased appetite from North American institutional investors in the cannabis sector.

And the company will be ready and able to leverage its recently acquired US-based business Sierra Sage Herbs LLC. and existing recreational cannabis brands at its Mernova Medicinal Inc. to advance US-focused opportunities in the lead up to potential decriminalisation.

Sierra Sage Herbs has strong brand recognition across the US and already sells and distributes a range of CBD and non-CBD products to major American retailers.


Setting sights on M&A opportunities

Following the Biden Administration’s announcement – and should cannabis be legalised on a federal level – Creso is bolstering its contingency plans to broaden the division’s offering for the US recreational cannabis market, seeking potential strategic acquisitions that can be implemented into current operations to serve the growing market.

Lay says the company will also benefit from its existing Board and management’s team and their experience in the North American cannabis sector, relationships with key decision makers and major retailers.



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This article was developed in collaboration with Creso Pharma Limited, 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.