Medicinal cannabis leader Creso Pharma enters giant Latin America market
Health & Biotech
Health & Biotech
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Creso Pharma’s global expansion strategy has taken another big step forward, with the establishment of a Latin American beachhead.
Creso (ASX:CPH) today announced the proposed acquisition of Colombian medicinal cannabis group Kunna S.A.S and its parent company Kunna Canada.
Under the deal, Creso would become the only Australian-listed medicinal cannabis company with direct exposure to Colombia.
Colombia is one of Latin America’s fastest-growing cannabis markets. Columbians spent $US86.3 million ($112 million) on cannabis in 2008 and consumption has grown at 15 per cent per year.
Sringboard to Latin America
The population of 47 million is seen as a springboard to access more than 600 million Latin Americans who live in nations where some form of medicinal cannabis is already legal including Colombia, Argentina, Chile, Mexico and Uruguay.
“The acquisition gives Creso a strategic foothold in the growing Colombian market and also the opportunity to further expand across the strategically important Latin American region,” said Creso Pharma co-founder and chief executive, Dr Miri Halperin Wernli.
“The granting of a production, manufacturing, cultivation and export licence in Colombia will give us a significant competitive advantage as Creso will be one of the few companies globally and the only medicinal cannabis company listed on the ASX with the capacity to commercially cultivate and export medicinal-grade cannabis in the Colombian environment.”
Colombia legalised medical cannabis in 2016 and the following year outlined a framework for cultivation, production and distribution (including exports) that set quality and consistency standards for the rest of Latin America.
Colombia has an ideal location and climate for producing high-quality, low-cost cannabis due to its expertise in the flower industry, skilled labour and a supportive government.
It is one of the most economically advantageous countries in the world for the production of large volumes of high-quality, low-cost cannabis.
Creso will pay $US7.15 million in scrip, up to $US1 million in performance shares and $US250,000 cash for Kunna.
Founded in 2012, Kunna S.A.S was one of Latin America’s first medicinal cannabis companies.
It aims to develop plant-based phytotherapeutic products to treat seizures, chronic pain, cancer, epilepsy, multiple sclerosis and other diseases.
Kunna is one of the few Colombian companies licensed to produce, manufacture, market and export cannabis derivatives and products.
It expects to be granted a licence to cultivate medicinal cannabis in Colombia by early next year – and is already preparing land for cultivation. There are plans to operate up to 600 hectares of cannabis-producing land.
Under the deal, Creso will be able to develop a complete vertical offering of standardised, cannabis medicinal-grade formulations and products for the local and broader Latin American market.
The proposed deal is expected to be finalised by April.
This special report is brought to you by Creso Pharma.
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