Creso Pharma signs Canadian medicinal cannabis supply deal

Medicinal cannabis developer Creso Pharma (ASX: CPH) has revealed the latest in a string of deals made since the start of the new year as it continues to build its global enterprise.

The company today announced the signing of a three-year agreement to supply a minimum of 100kg of cannabis flower per month to TerrAscend Canada.

The deal follows Canada’s federal legalisation of cannabis in October 2018 and the recent completion of Creso’s greenfield cultivation facility in Nova Scotia.

It also trails after Creso’s announcements earlier this month of a strategic collaboration in Sri Lanka and the expansion of a distribution agreement in New Zealand.

Creso chief operating officer John Griese said Creso was “ticking off each step in its strategic plan and quietly building a diverse global enterprise”.

“Few cannabis companies are currently commercial in countries across Europe and even less have established proprietary branded products such as Creso’s CBD-based Nutraceuticals cannaQIX and anibidiol in human and animal health,” he said.

Canadian market

Last month, Creso said the application for its Nova Scotia indoor cannabis-growing facility to become a licenced producer was currently in the “in progress” review by Health Canada.

The facility has a two-tier grow room structure and is currently capable of yielding 4,000kg of cannabis per year, meaning the TerrAscend deal will cover just under a third of the facility’s entire production capacity.

TerrAscend chief executive officer Dr Michael Nashat said the “state-of-the-art production facility makes [Creso] an ideal partner to support TerrAscend’s growth trajectory and commitment to the best-in-class products and formulations”.

“We are pleased to be working with Creso given their expertise in cultivation, propagation and product development,” he said.

Creso chief executive officer Dr Miri Halperin Wernli said the agreement was the result of a “long history of positive conversations” with TerrAscend.

“We believe our missions are complimentary and that opportunity beyond supply will strengthen both organisations,” she said.

Last month, the company announced its plans to dual list on the Toronto venture exchange, which is expected to take place sometime in February or March.

In today’s update, Creso said any funds raised from the listing will assist the further expansion of its human and animal CBD products. In particular, the listing will fund a phase two production expansion of its Nova Scotia facility to support the imminent regulations of infused edible products.

The company is also in ongoing discussions with the Nova Scotia Liquor Corp retail network and is expecting to receive preferred placement as a home-grown Nova Scotia cultivator.

Sri Lanka collaboration

Earlier this month, Creso announced it had signed a binding letter of intent with leading Sri Lankan pharmaceutical distributor Ceyoka Health to geographically expand its medicinal cannabis products into the island nation.

The partnership will initially focus on obtaining the necessary regulatory acceptance for Creso’s cannAFFORD-50 CBD lozenge to be sold as a therapeutic product, before exploring other joint initiatives in the medicinal cannabis space.

Dr Halperin Wernli described Ceyoka as an “ideal fit with Creso’s own philosophy”.

“In addition to their broad distribution network which accesses over 1800 pharmacies, this is a company which is heavily focused on investing in innovation,” she said.

New Zealand expansion

Also in January, Creso announced a binding letter of intent with its New Zealand partner Medleaf to expand on an existing distribution agreement.

Under the new deal, Medleaf will not only distribute Creso’s cannaQIX 50 product, but now also its full range of CBD-based medicinal cannabis products.

The partners have also agreed to build a comprehensive New Zealand-based cannabis business to explore local research and development activity, domestic cultivation, extraction and product development for meeting domestic and international demand.

This new collaboration follows recent regulatory change in New Zealand, which Dr Halperin Wernli said is expected to “lead to a wide range of new opportunities with initial investments by Medleaf”.

“With CBD products no longer regarded as controlled drugs but as prescription medicines, we expect improved patient access across the country,” the company stated in its announcement.