Creso Pharma (ASX: CPH) has reported its nearly completed due diligence to acquire Kunna Canada and its wholly-owned Colombian medicinal cannabis subsidiary Kunna SAS, with the transaction due to wind up next month.
Via the takeover, Creso aims to gain a strong foothold in the Colombian market and exposure to the larger Latin American region. Once the takeover is complete, Creso claims it will be the only ASX-listed medicinal cannabis company with direct exposure to the Colombian market.
Kunna SAS was one of Colombia’s first medicinal cannabis companies after it was established in 2012.
With the cultivation licence due in April, Kunna SAS will be full steam ahead with its plans to provide medicinal cannabis-based products to treat cancer, pain, seizures and epilepsy. The Colombian company secured approvals to produce, manufacture, market and export cannabis derivatives in March last year.
To assist with developing its cannabis, Kunna has a research partnership with GIEM group to investigate plant genetics and optimise cultivation.
Once operational, Kunna will be active across the entire medicinal cannabis supply chain.
“The acquisition and cultivation licence will give Creso a significant competitive advantage as one of the few companies globally and the only medicinal cannabis company listed on the ASX with the capacity to commercially cultivate medicinal-grade cannabis in this strategic and growing market,” Creso co-founder and chief executive officer Dr Miri Halperin Wernli said.
According to Creso, the Colombian market alone could provide up to six million patients for its medicinal cannabis products.
Additionally, the country’s drug control regulatory body has authorised 40.5 tonnes of medicinal cannabis to be harvested for export purposes – with Creso suggesting this could meet 44% of global demand.
The country is also believed to have other advantages such as an “ideal” climate for cultivation, providing an economic benefit to growing low-cost, high quality cannabis products.
This latest news comes after Creso reported construction was progressing of its 20,000 square foot Canadian-based medicinal cannabis production facility.
Construction kicked-off in the September quarter last year with formation roads, driveways, and land excavation finished and water, sewerage, drainage and power also completed.
Completion is targeted for July to coincide with the passing of recreational cannabis legislation which is planned to be passed in Canada.
The facility is anticipated to produce up to 4,000kg of cannabis a year.
Meanwhile, Creso has firmed up its medicinal cannabis expertise after appointing Amit Edri as its international business development executive.
Mr Edris was most recent position was chief operating officer of Israel’s largest medicinal cannabis organisation The Bazelet Group.
Shares in Creso were up almost 1% to A$1.03 by mid-morning trade.