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- Creso Pharma applauds recreational cannabis legalisation for adults in New York state.
- The Company appointed a Director of US Business Development, who will focus on delineating a strategy for Creso to commence delivering products in the US markets.
- The Company anticipates OTC listing this quarter, which is expected to provide additional exposure in the North American market.
- With the recent recruitment, Creso Pharma is well positioned to become the first mover in the US cannabis space, subject to legalisation.
Creso Pharma Limited (ASX:CPH, FRA:1X8) has announced the appointment of leading cannabis executive Mr John Griese, a leading cannabis executive, as the Director of US Business Development. The hiring follows a global trend towards legalising cannabis, including the recent legalisation of recreational cannabis in New York State.
Mr Griese would concentrate on Creso’s growth opportunities in anticipation of the US federal legalisation of cannabis. Moreover, the appointment is part of CPH’s commitment to expanding its presence in the US after the recent NY state legalisation and New Mexico’s recent legislature, which will legalise recreational cannabis use.
- As the COO, Supreme Cannabis Company, Mr Griese had handled commercialisation initiatives, manufacturing operations, product development, procurement, and supply-chain management.
He was also involved in aligning cost structure with revenue, ensuring compliance standards for developing new products. Mr Griese also assisted in optimising the Company’s four facilities and 650 employees to attain full capacity.
- As the COO of Bloom Farms, Mr Griese scaled the Company’s operations and executed several processes needed to meet the regulated adult-use marketplace requirements in California.
In his previous roles, Mr Griese acquired considerable knowledge of the North American cannabis industry and established relationships he would leverage to boost Creso’s growth.
As the Director of the US Business Development, Mr Griese will engage in revenue-generating and value-accretive prospects in the North American market to establish the Company’s footprint ahead of the recreational cannabis legalisation.
Following the legalisation of recreational cannabis in New York, Mr Griese will focus on New York, Vermont, and other states, to outline a strategy for Creso Pharma to commence product delivery in the US.
US OTC Listing progress
Creso Pharma also provided an update related to its US OTC market listing-
- The Company anticipates OTC listing in this quarter, which is likely to provide additional exposure in the North American market.
- The planned timing of listing is favourable following the recent regulatory developments in New York State, New Mexico, and Mexico, coupled with the US’s anticipated federal legalisation.
- The US dual listing provides greater exposure to Creso Pharma’s cannabis and psychedelic portfolio of products and treatments.
- Timing of the Dual listing bodes well as more US states legalise recreational cannabis.
Legalisation of Recreational Cannabis in New York
Creso Pharma has embraced the Marijuana Regulation and Taxation Act (MRTA), launched to legalise, tax, and regulate recreational cannabis for adults (21 years and over) in New York State. Notably, New York State is expected to become one of the leading recreational cannabis markets in the US, with an estimated value of US$4.2 billion.
Creso’s capacity to export its cannabis-based products into the US is subject to cannabis federal legalisation. Having Mr Griese start distribution, supply, sale, and partnership agreements, pending federal legalisation, provides Creso Pharma with the first-mover advantage in the large US cannabis space. Further, this will also provide the Company a substantial competitive edge over its peers.
After the federal legalisation, CPH anticipates a foray into the US via these alliances and agreements. Besides, this would allow the Company to cater to the major cannabis consumer market worldwide seamlessly.
The Marijuana Regulation and Taxation Act (MRTA)
- The MRTA was authorised on 31 March 2021; the framework to be established by 1 April 2021.
- As per the new legislation, up to three ounces of marijuana is expected to be legal to possess.
- If passed, New York State would become the 15th US state to legalise recreational marijuana.
- The MRTA will pave the way for the growth of a potential US$4.2 billion industry, which could introduce tens of thousands of jobs and lead to the creation of one of the biggest recreational cannabis markets in the US.
- The MRTA introduction pursues long-term efforts of recreational cannabis legalisation in New York State.
- The legislation would create the Office of Cannabis Management (OCM), and a Cannabis Control Board would regulate the sale and distribution activities.
New York Governor, Mr Andrew Cuomo, stated:
Established footprints in the Canadian recreational market
Creso is confident that its established Canadian operations would offer a first-mover advantage in the US recreational cannabis market following the legislation.
After the recent placement, Creso Pharma and Mernova are well funded to expand Canada’s manufacturing capacity and operations. The Company is prepared to pursue opportunities across North America when possible. While the potential market for legal recreational cannabis in New York State is valued at US$4.2 billion, the US market is expected to reach almost US$30 billion by 2025.
Mernova and CERES to stimulate growth via New York State
Creso Pharma has entered into a non-binding letter of intent (LOI) with CERES Natural Remedies in the US. CERES is a subsidiary of High Fidelity and a leading distribution company, based in Vermont.
With the terms of the LOI, both the companies entered into a formal commercial agreement with the terms on which CERES will sell anibidiol® animal health products of Creso through its established distribution network in the US, subject to cannabis federal legalisation in the US. The Company notified that the terms of the agreement had been extended to 1 August 2021.
Furthermore, Creso’s board and management are currently exploring several opportunities through Mernova and CERES to increase growth via New York State, subject to the US federalisation, following the recent legalisation of recreational cannabis in New York State.
Non-executive Chairman Adam Blumenthal said that Creso was very excited to welcome Mr Griese back to the Company. The board and management are confident that in his new role, he would help unlock several potential opportunities for the Company throughout the US.
Adding to this, John Griese commented:
On 7 April 2021, CPH shares were trading at A$0.202 (at AEST 10:38 AM).