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Creso Pharma Limited (ASX:CPH) develops and commercializes innovative and high-quality cannabis product. The company made an announcement today (24 January 2019) stating that it has successfully raised $3 million in Institutional Placement. Earlier on 22 January 2018, the companyâs securities were placed in the trading halt pending an announcement relating to the capital raising.
Under the terms of this Placement, the Company is going to issue ~6.67 million fully paid ordinary shares in the capital of the Company at $0.45 per share, together with one free attaching listed (ASX: CPHO) option ($0.80, 21 August 2020) for every 3 shares subscribed for under the Placement.Â
It is expected that the Placement and the issue of the securities will be completed on 29 January 2019. As per the ASX Listing Rule 7.1, no shareholder approval will be required to issue the securities.
Everblu Capital Pty Ltd who is the manager of this placement is entitled to get a fee of 6 percent of the total funds raised. The company also announced that no related parties, employees or associates of EverBlu participated in the Placement.
As a result of the director, Adam Blumenthalâs relationship with EverBlu, the Company was able to negotiate fees on an armâs length basis. The fees paid to EverBlu were the best the Company was able to negotiate in an efficient and expedient manner.
The proceeds of the placement will be used to accelerate sales and marketing efforts of its human and animal products in Europe and Canada. The proceeds will also be used to repay a portion of the companyâs debt and to fund the expenses of the Placement. As per the companyâs announcement, the Placement received strong interest from institutional and sophisticated investors.
Recently on 21 January 2018, the company signed a three-year supply agreement with TerrAscend Canada to provide its premium cannabis product to Canada. This agreement will help the company to meet the significant consumer demand in Canada which was driven by Canadaâs federal legalization of cannabis in October 2018.
Recently Creso Pharma Limited welcomed the Misuse of Drugs Amendment Act that came into force on the 18th December 2018.
The Misuse of Drugs (Medicinal Cannabis) Amendment Act brought in three important changes to New Zealandâs medicinal cannabis regulatory framework which include:
- An improved status for individuals requiring palliation.
- Medicinal cannabis products based on non-psychotropic cannabinoids such as cannabidiol (CBD) are no longer controlled drugs.
- Quality standards for medicinal cannabis products will be set at all stages of production, with clear guidance expected from New Zealand's Ministry of Health in 2019.
In January 2019, the company also announced a binding Letter of Intent (LOI) signed with Medleaf Ltd for a partnership to build a comprehensive cannabis business in New Zealand. The partnership is also focused on the expansion of the range of CBD based medicinal cannabis products available to New Zealand consumers.
New Zealand is an important part of the companyâs business plan for the APAC region. The company believes that New Zealand set to become as one of the fastest growing markets for cannabis-related products in the region.
Meanwhile, in the last six months, the share price of the company decreased by 18.18 percent as on 21 January 2019. CPHâs shares traded at $0.500 (-7.41% intraday) with a market capitalization of circa $67.06 million as on 24 January 2019 (AEST :2:00 PM).
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