As a Result of the Pandemic, Mental Illness is on the Rise and With a Severe Lack of Treatment Options, the Medicinal Psychedelics Industry Has Experienced Exponential Growth With Some Analysts Already Valuing the Market at USD $100 Billion
Already a Global Leader in the Cannabis Market, Creso Pharma Announced a Transformational Deal to Acquire Halucenex Life Sciences, an Established Canadian Psychedelics Company
The Deal Will Put Creso in Extremely Rare Air With CPH Stock Set to Offer Investors an Incredibly Attractive and Unique Opportunity to Own a Single Stock With Diversified Exposure to Both the Cannabis Sector and the Psychedelics Industry
Creso Pharma (ASX: CPH) (OTC: COPHF) (FRA: 1X8) announced on Monday that the company struck a deal with Halucenex Life Sciences to acquire the established Canadian psychedelics company.
The planned acquisition of Halucenex Life Sciences will give Creso Pharma the opportunity to enter the emerging medical psychedelics market and establish a significant first-mover advantage in the new sector. The transformational deal will see Creso Pharma, which is already an industry-leading provider of cannabis and cannabinoids, add psychedelics alternative medicine offerings. Once closed, the blockbuster acquisition will make Creso the first ASX-listed stock with 100% ownership of a psychedelics company.
“This is a major milestone for Creso Pharma and marks our evolution into a broader-based pharmaceutical business. Creso will now sell its trusted cannabis products and progress the commercialisation of a range of psychedelic-assisted psychotherapy treatments. Our entry into this market provides the Company with another lucrative vertical and an additional near-term revenue stream. “Mental health and PTSD are becoming detrimental to our society and this has been highlighted in the last 12 months. These conditions have been exacerbated by COVID-19 and the available treatments are shown to have limited effectiveness and many side effects. Psychedelic-assisted therapy is a new alternative treatment route, which has considerable promise. “The acquisition of Halucenex will strengthen our presence in Canada, as well as provide a number of opportunities in drug development which will inevitably lead to further new market entries and commercialisation opportunities,“ commented Adam Blumenthal, Non-Executive Chairman of Creso Pharma.
Introducing Halucenex Life Sciences
Halucenex Life Sciences is a Canadian life sciences development company based in Novia Scotia focusing on researching, developing and licencing novel psychedelic molecules for the global pharmaceutical and nutraceutical markets.
Halucenex is also dedicated to developing and licensing psychedelic compounds for the pharmaceutical and nutraceutical markets, as well as conducting clinical trials on the medical benefits of psychedelic medicine. Halucenex operates a 6,000 sq ft medical facility in Nova Scotia, complete with 6 treatment rooms and a secure laboratory which it utilizes for psychedelic-assisted psychotherapy and clinical research.
Currently, Halucenex is moving forward with clinical trials to research the efficacy of Psilocybin to treat Treatment-Resistant Depression in those suffering from PTSD and other mental illnesses. Psilocybin is the psychoactive compound found in “Magic Mushrooms.”
Following the receipt of its pending Controlled Drugs and Substances Dealer’s License, Halucenex will move forward and apply for a phase 2 clinical trial, which it expects to begin in Q3 of this year.
With a Dealer’s Licence, Halucenex will be permitted to possess medicinal psychedelics and conduct R&D and clinical studies on psychedelic substances such as Psilocybin, MDMA and LSD. After securing a Dealer’s Licence, Halucenex plans to obtain a Dealer’s Licence amendment, which will enable it to produce, package, assemble, sell, transport, import and export psychedelic substances.
“Halucenex is excited to be acquired by Creso and looks forward to levering its strategic relationships and expertise in the pharmaceutical industry. Halucenex has an early advantage in that it has applied for the Controlled Substances License, it has a laboratory for research on psychedelic compounds and a medical clinic to conduct micro and macro dose trials. Our ability to design a clinical protocol and fast track a phase 2 Treatment-Resistant Depression clinical trial will allow us to be one of the first companies to demonstrate the efficacy of psilocybin in Canada,” stated Bill Fleming, Founder & CEO of Halucenex.
Source: Creso Pharma Halucenex Acquisition Investor Deck
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Psilocybin Supply Chain Bottleneck
As the burgeoning medicinal psychedelics industry continues its rapid expansion, a bottleneck in the pharma-grade Psilocybin supply chain has formed and it’s expected to expand as a growing number of new companies enter the space and commence clinical trials.
Due to the fact that Psilocybin sourced naturally from magic mushrooms can sometimes have inconsistencies with its potency, psychedelics firms working in clinical settings prefer to utilize Synthetic Psilocybin. As a result, in order to ensure Psilocybin purity and dosage consistency, Health Canada will only approve clinical trials if the company has access to synthetic Psilocybin.
In response to Health Canada’s regulations and the current Psilocybin market supply crunch, Halucenex proactively inked a supply deal with Psygen Industries, one of the few pharmaceutical-grade synthetic psychedelics manufacturers in Canada. With the Psygen agreement, Halucenex secured an 11,600mg supply of synthetic psilocybin, which it will use in future Phase 2 and Phase 3 clinical trials. The risk associated with Halucenex’s clinical trial timeline has been reduced substantially after securing the psilocybin deal with Psygen and becoming 1 of only 11 companies to have such a supply deal in place.
Commenting on Creso’s momentous announcement, Bruce Linton, founder of Canopy Growth (TSX: WEED) (NASDAQ: CGC) (FRA: 11L1) and Board Director at MindMed (NEO: MMED) (OTCQB: MMEDF) (FRA: MMQ) added:
Source: Creso Pharma Halucenex Acquisition Investor Deck
Taking Care of Our Vets
Halucenex also has an affiliation with Veterans Affairs Canada via its Strategic Adviser David Fraser, which will provide a fast track to revenue through sales into a market with significant demand and government backing.
The prevalence of PTSD among veterans is considerably higher than the general population. Veterans Affairs Canada is a government department responsible for pensions, benefits and service to war veterans. The Canadian government has budgeted over C$25m over the next decade to support research on veteran health and spends over C$1.1Bn annually on disability pensions.
Halucenex’s short-term focus is on progressing clinical trials to assess the safety and efficacy of PAP using psilocybin to treat mental illness, with the aim of becoming a clinical drug pipeline provider, while also progressing two complementary business strategies.
Halucenex will conduct R&D to produce novel proprietary formulations of synthetic psilocybin in order to de-risk supply, increase yields for future micro and macro dosing formulations, and to open the manufacturing vertical. Alongside partners Acadia University and non-profit research organization Mitacs, Halucenex will research methods of synthesizing psilocybin in scalable quantities, with the aim of developing formulations for use in preclinical and clinical experiments.
Halucenex will also conduct R&D into the interactions between natural and synthetic psilocybin derivates to accumulate intellectual property on the entourage effects of naturally sourced psilocybin. In partnership with Acadia University and Mitacs, Halucenex is progressing the project to gather information on organic and synthetic psychoactive molecules derived from psychedelic psilocybin mushrooms, with preliminary results from the project expected by Q2 2022.
The Deal
Per the terms of the deal, Creso Pharma will acquire Halucenex in exchange for cash and stock. Payment for the Halucenex acquisition will consist of a $500,000 cash payment and 29,251,795 shares of Creso stock.
An additional 17,551,077 performance shares will convert into fully paid ordinary Creso shares if the dealer’s licence amendment happens within 12 months of the acquisition’s settlement.
Creso plans to obtain shareholder approval for all stock included in the acquisition at its upcoming AGM in April. Also, all shares related to the deal will be subject to a voluntary 6 month escrow period following the settlement of the shares.
For the acquisition’s full list of terms and conditions, please refer to Creso Pharma’s original press release here. Also, investors can view the company’s brand new Halucenex psychedelics acquisition investor presentation via the link below.
Read New Investor Deck: Creso Pharma Acquisition of Psychedelic Company Halucenex Life Sciences
CPH Stock Price Action & Chart – Breakout Alert🚨
Shares of Creso Pharma’s stock appears set for a major breakout as CPH approaches the apex of its extremely bullish pennant chart formation. Bull Pennants are continuation patterns that form during the period of consolidation that takes place following a large breakout. Bull Pennants are formed by converging support and resistance trend lines, that create the appearance of a physical baseball pennant.
As is often the case with this type of Technical Analysis continuation pattern, following the consolidation period that forms the pennant, the stock will break out above the upper resistance trendline as it approaches the pattern’s apex. After the confirmation of a successful breakout, the stock will normally continue moving higher following the direction of its current trend, which in the case of Bull Pennants, is upward. As a rule of thumb, the longer the period of consolidation, the larger the potential breakout’s move to the upside.
Taking a look now at the CPH chart below, you’ll see a gorgeous textbook Bull Pennant pattern that has been forming for nearly 4 months. If history is any indication, a very large move to the upside for CPH is likely imminent. Breakouts from these types of chart patterns are usually fueled by a large catalyst and in the case of Creso Pharma, the blockbuster psychedelics deal with Halucenex is as big as it gets. Move Creso Pharma (ASX: CPH) (OTC: COPHF) (FRA: 1X8) to the top of your trading watchlist immediately.
Source: Barchart
Learn more about Creso Pharma: Website | IR Website | Investor Deck | CPH Chart
. Australia – ASX: CPH
. United States | OTC: COPHF
Germany | FRA: 1X8
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