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Creso Pharma prepares for dual listing on Nasdaq as it storms ahead into new markets and products

Snapshot

Ahead of favourable regulatory changes in the US, the cannabinoid therapy developer hopes the dual listing will expedite growth and unlock value for existing Australian and new US shareholders. 

Creso Pharma Ltd - Creso Pharma prepares itself for dual listing on NASDAQ as it storms ahead into new markets and products

Quick facts: Creso Pharma Ltd

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ASX:CPH

Price: 0.1175 AUD

Market Cap: $141.18 m

Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) is pushing ahead for a dual listing on the Nasdaq and maintaining its listing on the ASX as it continues increasing its footprint into new markets and launches new products.

Ahead of favourable regulatory changes in the US, the cannabinoid therapy developer hopes the dual listing will expedite growth and unlock value for existing Australian and new US shareholders.

The move may also result in potential revaluations of Creso Pharma in comparison to North American peers in the cannabis and psychedelic sectors. 

To assist with the dual listing process, the company has retained the services of boutique corporate advisory firm, New York-based, EAS Advisors LLC.

Discussions with additional investment banks are well progressed and it expects to make an additional appointment in the coming months.

"Easier comparisons"

Creso Pharma, which started trading on the OTCQB market on June 11, 2021, is targeting a Nasdaq listing in the first half of 2022.

Non-executive chairman Adam Blumenthal said: “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.

“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."

Well capitalised

Blumenthal continued: “The company remains well capitalised, 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.”

Its cash position in the first half surged 488% to $15.970 million.

During the period, Mernova Medicinal Inc’s revenue climbed 519%, CYTD group revenue rose by 98% while Creso Swiss revenue chalked up 11% gains over the first half of 2020.

Favourable legislative changes

Should the favourable legislative changes in the US cannabis and psychedelic industries occur, this will potentially provide an ideal operating landscape for Creso Pharma to pursue strategic growth opportunities.

The Marijuana Opportunity Reinvestment and Expungement Act, Marijuana Regulation and Taxation Act, and the Cannabis Administration and Opportunity Act - all aimed at legalising, taxing and regulating recreational cannabis have been introduced in the US Senate.

SAFE Banking Act will also provide cannabis-related businesses with swift access to depository institutions for banking services.

A total of 36 states have legalised cannabis for medical and recreational use, with additional states expected to follow.

California State is in advanced stages of legalising the possession of psychedelics including psilocybin and LSD.

Blumenthal said: “Over the recent months, we have made a number of US-focused appointments and Halucenex has secured multiple partnerships and agreements that will allow the company to pursue the US psychedelics market and become a first mover in the sector."

Strengthened management team

Earlier in September 2021, Creso Pharma appointed William Lay as executive vice president – Strategy, Origination & Operations and Dr Miri Halperin Wernli, a  founder and former director, as strategic advisor.

Both executives have considerable expertise in the psychedelic, recreational cannabis and CBD industries, as well as established networks across North America and other international markets which will be beneficial for Creso Pharma as it progresses its growth trajectory.

Creso Pharma is also continuing to add to its executive management and operational staff in preparation for its proposed North American entry, as well as progress other opportunities that have recently arisen.

Cannabis market growth rates

According to the Global Drug Survey, of the 110,000 respondents worldwide, 6,500 people reported having self-medicated using psychedelics such as LSD, MDMA and psilocybin,

According to the global drug survey, 86% of respondents suffering from mental health issues found that supervised psychedelic sessions reported the session was helpful.

Market growth rates

  • THC Canada 2026: C$9 billion (19% CAGR);
  • THC US 2025: US $41 billion (16% CAGR);
  • CBD Europe 2026: US$26 billion (45% CAGR);
  • CBD US 2028: $13 billion (21% CAGR); and
  • Psychedelics North America 2027: US$6.8 billion

Halucenex Life Sciences strategy

Halucenex Life Sciences Inc has a three-tiered strategy to become a fully vertically integrated provider of psilocybin and psychedelic-assisted psychotherapy to revolutionise the treatment of mental illnesses.

Considerable progress has been made towards clinical trials to test the efficacy of psilocybin on treatment-resistant post-traumatic stress disorder (PTSD).

This includes securing several key partnerships allowing for patient recruitment, post-trial care and initial testing of its psilocybin product, unlocking Halucenex to a lucrative market, estimated to be worth up to US$25 billion by 2025.

It plans to produce synthetic psilocybin in-house to replace third-party supply agreements and potentially allow Halucenex to supply to other distributors and practitioners.

The company currently is one of only 11 companies to secure synthetic psilocybin supply from Psygen Industries Ltd – the only pharmaceutical-grade psilocybin producer in Canada.

Halucenex also plans to develop products across a range of delivery methods such as psilocybin-infused capsules and tinctures.

Its business plan is to fast track to commercialisation via the veterans market, which will deliver cash flow early, while maintaining a flexible business plan that will allow the company to adapt to the changing regulatory environment.

Halucenex has strategic affiliations with Veterans Affairs Canada and Veteran Support Groups via Adviser David Fraser.

Mernova’s 2021 milestones

Mernova has continued to progress its strategy to supply premium quality, artisanal cannabis and cannabis products in Canada.

It secured medical cannabis sales licence from Health Canada in 2021, allowing it to sell cannabis products for recreational and medicinal purposes.

The license extension allows for Canada-wide, direct-to-patient sales, eliminating the need for provincial/territorial wholesalers and allows direct interaction with consumers and better product quality control.

As Mernova continues to scale up production according to its three-phase plan, it has strengthened its senior management team with two ex-Canopy Growth Corporation alumni – Jack Yu as managing director and Isaac Allen as vice-president.

Mernova’s medicinal subsidiary is in the advanced stages of securing EU GMP certification which will give it the licence to sell GMP products in the EU.

Once EU GMP certification is received, Mernova will be one of only a small number of Canadian LPs with a licence to export to the EU.

Expanding Euro footprint

Earlier this month, Creso Pharma secured two new purchase orders with a combined value of CHF230,000 (~A$337,577) that will broaden its European market presence.  

While CPH has signed several purchase orders over the last 12 months, this represents an important milestone for the company, as it underpins the company’s geographic expansion regarding its human health business.

Additional purchase orders are also being discussed between Creso regarding the latter’s animal health products.

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