The management at global cannabis powerhouse Creso Pharma (ASX: CPH) (OTCQB: COPHF) (FRA: 1X8) is well aware of the value associated with which stock exchange a company’s shares trade on. Based in Australia, Creso’s stock currently trades on the Australian Securities Exchange (ASX), as well as the OTC Markets Exchange in the U.S.
However, management announced big news recently, with Creso reporting it intends to uplist its American-listed shares to a much more prestigious national exchange, the NASDAQ.
Such an uplisting will increase the company’s available investor base by an order of magnitude, which should prove useful as the company needs continuous funding for its global expansion plans.
The uplisting appears to specifically be in pursuit of breaking into the U.S. cannabis space. Acquiring an existing multi-state operator would be the quickest way to break into the industry in a big way, but that will require the company to raise a significant amount of money Non-executive Chairman of the Board Adam Blumenthal commented:
“Following potentially favourable legislative shifts, a NASDAQ listing will also provide us with access to the world’s largest recreational cannabis market and a growing psychedelic medicines sector. Pleasingly, a dual listing opportunity will also allow Creso Pharma to retain its ASX listing, which we believe is in the best interests of our longstanding and faithful shareholders. The Company remains well-capitalized, with considerable financial flexibility to pursue these initiatives. The Company has achieved a number of milestones in recent months, which set a very strong foundation for growth. We look forward to progressing a number of corporate and operational developments and unlocking value for our shareholders.”
Creso Pharma – Global Cannabis Leader
While the company is gearing up to burst into the U.S. in a big way, Creso Pharma already has extensive operations internationally. Despite being based out of Australia, Creso currently does the majority of its business in Canada and Europe, with recent supply agreements bringing them into Southeast Asia and the Middle East.
Creso’s flagship is cannaQIX, which is a line of CBD-infused products. The brand is available in a variety of formats, including therapeutics, nutraceuticals, animal health and cosmetics, all of which are carefully formulated to maximize the amount of CBD that is absorbed by the body. The products are meant to assist with sleep, stress and relaxation. Currently available on three continents, cannaQIX has a further reach than any other cannabis brand.
Meanwhile, Creso is heavily involved in the Canadian cannabis market. Their flagship production facility in Novia Scotia produces a number of product formats under the Mernova brand, including flower, pre-rolls and hashish. These products are available across Canada. The facility is also GMP-certified, meaning that they are able to export certain products to the European marketplace.
The facility is a fraction of its potential size and the company intends to expand it as they continue to grow their Canadian business and make their way into the U.S. cannabis space. When the U.S. finally gets around to legalization, this facility could potentially be used to export Creso’s brands from Canada to the U.S.
Red Light Holland Breakup
We reported back in June that Creso Pharma was merging with Red Light Holland (CSE: TRIP) (OTC: TRUFF) (FRA: 4YX) to form the fantastically named Highbrid Lab, with the goal of establishing the first truly global cannabis and psychedelic company. Unfortunately, the proposed merger has been halted. It appears that the current uptick in COVID-19 cases globally is largely to blame for the merger falling through. The travel necessary to consolidate the companies, which are spread across multiple continents, proved unfeasible in the current environment.
Blumenthal explained in more detail, why the two companies decided to put the breaks on the merger:
“The mutual and strategic decision to terminate our agreement with Red Light Holland follows extensive due diligence, as well as in-depth market reviews and consultation with a number of investors in the US and Australia. We will maintain a strong working relationship with Red Light Holland in the future and look forward to progressing agreements that will unlock value for both parties. We respect Todd Shapiro and the entire team at Red Light Holland. Unfortunately, the geographic span of our respective businesses made a merger at this time impractical. We look forward to working with the Red Light Holland team through our new supply arrangement.”
Blumenthal followed up his comment by stating:
“We are now shifting our resources and focus to the proposed NASDAQ dual listing. The Company anticipates that this development will allow for easier comparisons to our North American listed peers and allow Creso Pharma to be valued accordingly.”
The supply agreement mentioned by Blumenthal will involve Red Light Holland white-labelling and distributing Creso’s products in certain European markets where Creso does not yet have a presence, namely the Netherlands. Creso does not appear to be giving up on psychedelics altogether, as Mr. Blumenthal stated that besides the cannabis space, the NASDAQ uplisting would give them the funds needed to enter the burgeoning psychedelic medicine industry.
It’s fair to say that a public company has not “made it” until they are listed on a major American exchange, namely the New York Stock Exchange (NYSE) or the NASDAQ. Creso Pharma is about to join the Nasdaq, putting them in the big leagues. It will be an important accomplishment, as it gives them access to a much wider pool of investors, which will be sorely needed if they are to carry out their grand plans. Said investors should be richly rewarded as Creso Pharma becomes the first global cannabis powerhouse. If the company becomes a dominant player in psychedelics as well, this could a once in a lifetime opportunity.
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Creso Pharma is a paid client of The Cannabis Investor. The Cannabis Investor does not hold a position in CPH.
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