Creso Pharma soars on landing three new Canadian purchase orders and expanding into Canada’s largest recreational market

Creso Pharma Ltd (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) has soared 88% after subsidiary Mernova Medicinal Inc received three new purchase orders as well as a notice to purchase from the Province of Ontario, marking the company’s entry into Canada’s largest recreational cannabis market. Purchase orders (POs) received have a total combined value of C$275,023 and include a bulk purchase order from the Truro Cannabis Co, a maiden purchase order from the Yukon and an additional purchase order from the NSLC. These open potential new opportunities for new Canadian markets in Ontario and the Yukon, which recorded combined sales for recreational cannabis of over C$300 million for 2020 YTD. Shares have soared almost 88% to a new 12-month high of A$0.475 and the company's market cap sits at approximately A$161.8 million. "Strong progress" in Canada Managing director Jack Yu said: “Mernova continues to make very strong progress in the Canadian recreational market. “The three most recently secured purchase orders will contribute to Creso Pharma’s growing revenue profile and we expect additional orders to materialise in the very near term. “We are proud to announce that Mernova has been chosen to become part of a very select group of licensed producers with cannabis products for sale in the Yukon. “This is a major achievement for us, and we expect growth to continue across Canada and, with our pending entry into Ontario, Canada’s largest recreational market, we expect rapid growth to continue.” Truro order The first purchase order valued at C$232,826 is from Truro Cannabis Company, comprising a bulk order for three of Mernova’s high-quality, indoor-grown, hand-trimmed, hang dried, cured, artisanal cannabis strains in dried flower form, specifically HPG13, Lemon Haze and Mimosa. Truro Cannabis Company is a licensed producer of medical and recreational cannabis products. The group has an established presence across Canada and will sell Mernova’s products through their well-established distribution channels. Yukon maiden order Creso Pharma also received a maiden purchase order from the Yukon Liquor Corporation opening a new Canadian market, with the company anticipating further orders in the future. The purchase order is valued at C$24,333 and is for the HPG13, Lemon Haze and Mimosa strains, in dried flower form. These products will be sold under the Ritual Green brand in 3.5 gram and 7-gram units, through leading retailer Triple J’s Canna Space. Creso Pharma anticipates further repeat orders from the Yukon in the short term. NSLC reinforces trend The third purchase order was secured from the Nova Scotia Liquor Corporation (NSLC) for the Lemon Haze and Mimosa strains and is valued at C$17,863. It is the fourth purchase order received from the NSLC, indicating a trend towards a recurring revenue model from the NSLC. Notice to Purchase from Ontario Mernova has also received a Notice to Purchase from the Province of Ontario for its HPG13, Lemon Haze and Mimosa strains. Formal registration is being finalised by Mernova as well as listing phases and the receipt of an initial purchase order is expected in the near-term. It is anticipated that Mernova’s Ritual Green products will be sold in stores at Ontario Cannabis Store (OCS) locations across the region and through their online sales platform. Once finalised, this order will mark Creso Pharma’s entry into Ontario, a significantly large new sales channel. Significant demand for cannabis products Ontario is regarded as Canada’s largest recreational market and has more than a quarter of the country’s market share, with almost C$400 million in legal sales recorded from April 1, 2019, to March 31, 2020. These developments serve as confirmation of the significant demand for Mernova’s high-quality cannabis products in the rapidly growing Canadian retail recreational market.