Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF)’s wholly-owned Canadian subsidiary Mernova Medicinal Inc. has progressed several initiatives to enter Canada’s medicinal cannabis market.
The major highlight includes being appointed as maiden distributor of medicinal cannabis products in Canada by JMF Growers, which is focused on the production, distribution and online sale of medicinal cannabis products to patients across the country.
Established in 2021, JMF provides a range of medicinal cannabis products from Canada’s approved producers to patients. Mernova will initially stock some of its Ritual Green strains with JMF, which will be sold to patients on consignment.
There is scope to broaden the stock line, should the partnership bear fruit.
This is a positive development for Mernova and Creso as it gives them another point of entry into the Canadian medicinal cannabis industry which had a value of US$444 million in 2021.
“Mernova’s management team are continually looking for ways to expand, grow sales and unlock additional value as a business division,” CEO and managing director William Lay said.
“To have secured an agreement with a burgeoning medicinal cannabis distribution company and a Research Licence from Health Canada highlights the division’s innovative approach and are expected to provide a strong base for additional growth opportunities.
“We look forward to progressing first product shipments to JMF, which will commence our entry into Canada’s medicinal cannabis market.
“Products will then be packaged in line with current regulations and sold on consignment through the group’s growing online platform.
“Most importantly, this unlocks another sales channel and an opportunity to push the division closer to a cashflow breakeven point.”
JMF has built a strong industry presence. Patients are registered through a separate platform, from several authorised producers in Canada and are encouraged to register for medicinal cannabis use through the group’s associated platform www.kuzen.ca.
The platform highlights the group’s partners, as well as clients whom they seek to take the greatest care of.
Mernova will supply products including Black Mamba, Lemon Haze, Mac 1 and Monkey Berries in 3.5g dried flower formats, which will be sold on consignment through the group’s established online channels.
JMF has also expressed interest in stocking Mernova’s Lemon Haze vaporiser and pre-rolled joint products.
Under the terms of the agreement, JMF Growers has provided Creso Pharma with the freedom to do business with another distributor throughout its relationship with the group. Either party can also cancel the agreement by written notice 30 days prior to an anticipated termination date.
Mernova reached another milestone when it was granted a Research Licence by Health Canada under the Canadian Cannabis Act and Cannabis Regulations.
The licence will be used for research involving the administration or distribution of cannabis (after QA product release) to human research subjects for assessments of taste, sight, smell and touch of cannabis.
This licence follows an extensive application process and thorough review, which took into account Mernova’s facilities, current practises and protocols, personnel as well as its proposed uses.
Mernova will utilise the Research Licence to test products created at its facility, prior to retail sales.
Any product that is not deemed reasonable for sale by Mernova’s product quality team will be put aside for THC and CBD extraction, or a wholesale opportunity.
Mernova hopes to gain additional insight into the appearance, touch, aroma and flavour of its range prior to future growing cycles and ongoing product development.
“The recently acquired Research Licence from Health Canada will also provide considerable insight into our range of strains, ways to improve them to drive retail sales and the ongoing product development initiatives,” Lay added.