Creso subsidiary Mernova Medicinal expands further into Canada, secures largest purchase order
Health & Biotech
Health & Biotech
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Creso Pharma’s wholly-owned Canadian subsidiary Mernova Medicinal Inc has increased its footprint in Canada following expansion into Manitoba.
Aussie pot stock Creso Pharma (ASX:CPH) said it is the sixth Canadian province that Mernova has entered with the company now having a presence in 60% of Canada’s provinces with additional market entries pending.
Mernova has also received the largest ever purchase order secured from any province to date from the Nova Scotia Liquor Corporation (NSLC) valued at C$326,793 ($350,244.65)
Mernova’s confirmed purchase orders for Q1 FY23 are now C$699,470 ($748,432), making January 2023 the most productive month in Mernova’s operating history.
Entry into the province follows consultation and registration processes with the Manitoba Liquor & Lotteries Corporation (MBLL), which is a Crown corporation in the province.
MBLL manages the wholesale purchase and distribution of recreational cannabis for sale to retailers in the province, while coordinating with licensed producers to provide a direct to retail store product delivery model.
Following the consultation and review by MBLL, Mernova has listed a total of 39 stockkeeping units (SKU) from its Ritual Green, Ritual Sticks,and Ritual Gold product ranges.
Items for sale now include the company’s dried flower products, electronic vaporisers, and pre-rolled joint ranges.
The expansion provides another large addressable market opportunity, allowing the company to potentially service a wide range of customers across 170 cannabis retail stores in Manitoba.
Additional sales from the province will assist Mernova as it continues towards profitability in FY23.
The largest purchase order follows the acceptance of seven new products by the NSLC in the most recent round of product call review.
The products were selected following a rigorous evaluation by the governing body of 1,200 submissions which led to a total of 75 new listings.
The NSLC is the sole distributor of recreational cannabis in the province. Mernova now has a total of 14 stock keeping units (SKU) listed for sale in the province across its Ritual Green, Ritual Stick and Ritual Gold product suite.
The recently accepted SKUs will arrive in the distribution centre on February 17 with a target date for the products to be in the market of March 13 which leads to starting sales towards the end of this quarter.
The purchase order is set to underpin revenue growth during FY23.
Mernova has also completed additional testing of cannabinoid content across four of its Ritual Green cannabis strains, which has highlighted significant THC content.
The high-content THC strains provide Mernova with another competitive advantage and are the strongest batches the company has released since its inception.
Recent testing showed Mernova’s most recent dried flower batch of French Cookies had total THC content of 30.97%, Mac 1 had total THC content of 33.5% and 32.81% across two new batches.
Lemon Haze had total THC content of 32.02%, and Black Mamba had total THC percentage content of 30.3%, 31.18% and 34.66% across three new batches.
Each new batch considerably exceeds the industry average THC content levels for dried flower products, which is estimated at approximately 15%.
Creso said the increased SKUs and high total THC numbers will position Mernova in a better place against local and other competitors in this industry.
Further, the new listings will provide additional exposure for Mernova with consumers and have the potential to increase sales during the current quarter and beyond.
Mernova is actively marketing the new high-content total THC batches to a range of new and existing province partners and anticipates purchase orders to materialise shortly.
Creso CEO and managing director William Lay expansion into Manitoba broadens the group’s exposure for recreational cannabis sales to 60% of Canada’s provinces and will unlock another revenue generating opportunity.
“Having 39 SKUs listed with MBLL will allow cannabis retailers in Manitoba the ability to gain an understanding and feel for Mernova’s high-quality cannabis products, which we are confident will be well received by consumers,” he said.
“We look forward to providing additional updates on first purchase orders from the province during the quarter.”
Lay said to have secured the largest purchase order since the company’s inception from the NSLC shows Mernova’s ability to establish itself in a competitive market and grow its footprint.
“Demand for our products continues to increase across Canada and we anticipate sales will continue to grow in 2023.”
Creso welcomed news in December of the passing of the Medical Marijuana and Cannabidiol Research Expansion Act in the US and has a strong base in North America.
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.