Value – up to AUD$10.25m
- HighlightsKhalifa Kush Enterprises (KKE) is the Canadian arm of Wiz Khalifa’s global cannabis company
- Deal is worth up to $10.25m for Creso
- Mernova and KKE will collaborate to cultivate and distribute Khalifa Kush branded cannabis products from KKE’s leading plant genetics in Canada
- Mernova to produce approximately 50kg per month and receive C$3.60/g from KKE
- First cultivation set to commence within approx. 60 days with rapid scale up expected.
- Agreement to considerably increase Creso’s growing revenue streams – initial sales earmarked to commence for end of 1q.
Creso Pharma Limited (ASX:CPH, FRA:1X8) (‘Creso Pharma’ or ‘the Company’) is pleased to advise that it’s wholly-owned Canadian subsidiary Mernova Medicinal Inc. (“Mernova”) has signed a non-binding term sheet with Khalifa Kush Enterprises Canada ULC (“KKE”) to cultivate and distribute dried cannabis flower sourced from KKE product genetics to the Canadian market.
Khalifa Kush Enterprises was founded in 2018 and is the first expansion of Khalifa Kush outside of the US. Khalifa Kush products were first commercialised in the US in 2015 by multi-platinum, Grammy Award and Golden Global nominated recording artist Wiz Khalifa and his long time business associates Will Dzombak (CEO, Taylor Gang), Tim Hunkele (Vice President, Taylor Gang) and Constance Schwartz (Founder and CEO, SMAC Entertainment).
Khalifa Kush has achieved major success in the US market, following the creation of high quality and sought-after products which are currently being sold in Nevada and Arizona.
Mernova Managing Director, Jack Yu said:
“This agreement is a signigicant achievement for Mernova and Creso Pharma. It follows considerable due diligence from Khalifa Kush on the Company’s production facilities and manufacturing capabilities and highlights the integrity and trustworthiness of our operations.
We expect that sales of KKE products will add considerably to our growing revenue streams and unlock a number of new provinces and opportunities for Mernova. We will work closely with KKE to ensure the product is of a superior quality and well received by customers.
We have a number of potential sales channels already earmarked and look forward to providing shareholders on progress over the coming months.”
Under the agreement, Mernova and KKE will collaborate to cultivate and distribute Khalifa Kush dried cannabis flower products sourced from leading KKE product genetics for the Canadian market. Mernova will be charged with the cultivation, harvesting and packaging of the products, which will be undertaken at its fully licenced 24,000 square foot facility in Nova Scotia.
Creso will dedicate XX flower rooms to the new products and produce a minimum of 50kgs of product per month. In return, KKE will pay Mernova and Creso Pharma C$3.60 per gram of product. This is expected to significantly increase the Company’s revenue profile. Both parties will also work together to increase harvest and cultivation volumes over the next twelve months.
Mernova and Creso will also retain a first right of refusal to cultivate and sell other KKE cannabis products including edibles, vapes and concentrates on reasonable commercial terms in any jurisdiction outside of the US and Canada.
This agreement is a major achievement for Creso Pharma and highlights its ability to manufacture product at the highest standard for the Canadian market. The Company expects sales of KKE products to materially add to its revenue profile. First cultivation is expected in q1 2021 and management looks forward to providing ongoing updates to shareholder on progress.
Authority and Contact Details
This announcement has been authorised for release by the Creso Board
For further information, please contact:
E: [email protected]
P: +61 2 8249 0000
About Creso Pharma
Creso Pharma Limited (ASX:CPH) brings the best of cannabis to better the lives of people and animals. It brings pharmaceutical expertise and methodological rigor to the cannabis world and strives for the highest quality in its products. It develops cannabis and hemp derived therapeutic, nutraceutical, and life style products with wide patient and consumer reach for human and animal health.
Creso Pharma uses GMP (Good Manufacturing Practice) development and manufacturing standards for its products as a reference of quality excellence with initial product registrations in Switzerland. It has worldwide rights for a number of unique and proprietary innovative delivery technologies which enhance the bioavailability and absorption of cannabinoids. To learn more please visit: www.cresopharma.com
Forward Looking statements
This announcement contains forward-looking statements with respect to Creso and its respective operations, strategy, investments, financial performance and condition. These statements generally can be identified by use of forward-looking words such as “may”, “will”, “expect”, “estimate”, “anticipate”, “intends”, “believe” or “continue” or the negative thereof or similar variations. The actual results and performance of Creso could differ materially from those expressed or implied by such statements. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations. Some important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition and government regulation.
The cautionary statements qualify all forward-looking statements attributable to Creso and persons acting on its behalf. Unless otherwise stated, all forward-looking statements speak only as of the date of this announcement and Creso has no obligation to up-date such statements, except to the extent required by applicable laws.
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