50% Crash In The Price Of Creso Pharma In 1 Year

Medical Cannabis Company, Creso Pharma Limited’s (ASX:CPH) shares have lost almost half their value in the last one year. Despite being a part of the booming cannabis industry, this pot stock’s share prices have declined by approximately 50 percent in a one-year span of time.

Creso Pharma was the first company to import medicinal cannabis into Australia, and it was also the first one to launch various cannabis products into Switzerland. This medicinal cannabis company penetrated the Canadian Market through the acquisition of Mernova, a Nova Scotia based Medical Cannabis growing operation, which provided the company with an opportunity to cater to Canada's growing cannabis industry. Through the acquisition of Mernova, Creso became one of the very few Australian cannabis companies which are having direct exposure to the world’s largest legal medical cannabis market in Canada. Moreover, the company is also having direct exposure to the Colombian market.Â

Recently in January 2019, the company entered a three-year supply agreement with TerrAscend Canada to supply its premium cannabis product to Canada's growing cannabis market; further, TerrAscend has also agreed to buy a minimum of 100 kilograms of cannabis flower each month from Creso. This three-year supply agreement is the major step forward in the company’s objective of entering into the Canadian cannabis space.

Recently the company raised $3 million capital through Institutional Placement to ramp up its sales and marketing efforts of its human and animal products in Europe and Canada. The company is also planning to get listed on the Toronto Venture Exchange (TSX-V) which is a premier exchange for listed cannabis companies worldwide. The company has started the listing process, and it has already hired legal counsel Aird & Berlis LLP and lead broker Echelon Wealth Partners Inc. to advise on the listing.

Creso Pharma is also expanding its footprint into Sri Lanka, for that, it has signed a binding Letter of Intent with Sri Lanka’s leading pharmaceutical distribution company, Ceyoka Health (Pvt) Ltd. Through this partnership, the company is eying to distribute its innovative therapeutic medicinal cannabis products into Sri Lanka region and it is also planning to explore a range of additional activities in the medicinal cannabis space of Sri Lanka.

Creso Pharma is also having its operation in Israel by having 74% stake in a Joint Venture with Israeli-based Cohen nurseries. Recently, Israel’s Parliament passed a New Medical Cannabis Export Law which has approved the exporting of medicinal cannabis from Israel which will allow Israel to participate in the global medicinal cannabis industry. The company is well positioned to take advantage of these changes through its Joint Venture which will allow Creso to export cannabis strains from Israel.

For the year ended 31 December 2017 (FY 2017), the company reported a loss of $15.07 million which was 229% higher than the loss of $4.58 million in the previous corresponding year. The basic and diluted loss per share was 18.13 cents in FY 2017. As at 30 September 2018, the company had cash and cash equivalent of $10.226 million.

In the past six months, the share price of the company decreased by 26.43 percent as on 24 January 2019. CPH’s shares traded at $0.495 (-3.833% intraday) with the market capitalization of circa $63.96 million as on 25 January 2019 (AEST 1:46 PM).

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