Creso Pharma (ASX: CPH) has shouldered into Latin America’s medicinal cannabis market with its proposed acquisition, worth about US$7.5 million, of Kunna Canada and its 100%-owned Colombian subsidiary Kunna S.A.A.
As part of the acquisition, Creso will pay an US$250,000 exclusivity option payment and issue US$7.15 million shares at A$1.10 each, subject to regulatory approval and due diligence.
According to Creso, the takeover positions it as the only ASX-listed medicinal cannabis company with direct exposure to the Colombian market.
The acquisition will give Creso a foothold in the country and enable it to expand throughout the wider Latin American region.
Kunna S.A.S was established in 2012 as Cannalivio and is one of the region’s first medicinal cannabis companies.
The Colombian company gained its licence to produce, manufacture, market and export cannabis derivatives in March this year. The company plans to create phototherapeutic products to treat seizures, chronic pain, cancer, epilepsy and multiple sclerosis, once it gains its cultivation licence which is anticipated to be granted in the next three months.
Kunna has a research partnership with GIEM group to investigate plant genetics, disease and optimise cultivation.
Commenting on the acquisition, Creso co-founder and chief executive officer Dr Miri Halperin Wernli said it gave Creso a “strategic foothold in the growing Colombian market and also the opportunity to expand across the Latin American region.”
“The granting of a cultivation licence in Colombia will also give us a significantly 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 medicinal-grade cannabis in the Colombian environment,” Dr Halperin Wernli said.
Colombia’s population sits at 48.6 million people, while Latin America is home to more than 400 million people living in countries where medicinal cannabis is legal.
In early afternoon trade, Creso’s stock has risen 2.41% to sit at A$0.85.