Press Release
Highlights
Non-binding Letter of Intent entered into with CERES Natural Remedies (“CERES”) to distribute anibidiol® in the US
CERES is a leading provider of plant-based medicines and CBD products and an operating business of High Fidelity, Vermont’s largest independent cannabis company
High Fidelity has an established footprint and has generated over US$35m in revenue since 2013
CERES has three traditional retail stores and an established distribution footprint of ~50,000 outlets in the US focusing on high growth customer segments
CERES will aim to achieve a target of US$5m in anibidiol® sales over the first two years of the agreement, subject to federal legalisation of CBD in the US
The US is a major market opportunity for Creso with considerable growth expected
Creso Pharma Limited (ASX:CPH, FRA:1X8) (‘Creso Pharma’ or ‘the Company’) is pleased to advise that it has executed a non-binding letter of intent (“LOI”) with leading CBD and plant-based remedies provider CERES Natural Remedies (“CERES”) (www.ceresremedies.com) to distribute and sell Creso’s range of CBD and hemp animal health products anibidiol®, in the USA.
CERES is a leading Vermont headquartered distribution company, specialising in plant based remedies and CBD and hemp products for the US market. It is the sister company to Champlain Valley Dispensary, Vermont’s first licensed and only independent medicinal cannabis company.
Champlain Valley Dispensary and CERES are both subsidiaries of High Fidelity, Vermont’s largest independent cannabis company. High Fidelity currently operates two of the five vertically integrated cannabis licences available in the state and services 70% of registered patients. Since 2013, High Fidelity has generated in excess of US$35 million in revenue.
CERES has three traditional retail stores in Vermont and access to over 50,000 distribution outlets across the country. It services a number of high growth customer segments, including conventional and convenience based grocery stores, colleges and universities, fast food outlets, natural grocers and medicinal and recreational cannabis dispensaries. In addition to its own branded products, CERES has a strong track record of scaling up regional, national and international brands through its sales channels. Creso expects to leverage CERES’ established relationships to expand the Company’s footprint into the US.
Under the agreement, the parties have agreed to enter into a formal commercial agreement on or before 1 April 2021 setting out the terms upon which CERES will sell Creso’s anibidiol® animal health products through its established distribution network in the US, subject to federal legalisation of CBD in the US.
Images: CERES Natural Remedies, Flagship store in Burlington Vermont
Initially, it is intended that CERES will focus on Vermont, Maine, New Hampshire, New York, Connecticut, Massachusetts and Rhode Island and explore opportunities to target additional states across the US.
Creso and Ceres will work together collectively to prepare to sell and distribute within the US market upon legislation occurring which both groups believe will happen in 2021.
The initial term of the agreement is one year (“Initial Term”) and will automatically renew after one year (“Renewal Term”), unless either party notifies the other of their decision to not renew the agreement within 90 days prior to the expiry of the Initial or Renewal Term. Initial Term and Renewal Terms are subject to termination for cause upon notice by either party, or upon failure to meet the above referenced renewal conditions.
CERES will aim to achieve a target of at least US$5 million in sales over a two-year period, subject to federal legalisation of CBD in the US. The Company has recently witnessed considerable shift in the regulation of cannabis globally and eagerly awaits legislative reform in the US (refer to ASX announcements from 8 January 2021 and 7 December 2020). Creso and Ceres are forming the view this legislation may occur at some point during 2021 and intend to formalise the commercial agreement quickly in order to be able to move swiftly upon such legislation occurring.
The US represents a large, emerging addressable market for Creso. The global CBD pet supplements market was valued at US$27.7m in 2019 and is anticipated to grow at a 40% compound average growth rate from 2020 to 2027[1]. This agreement leaves Creso very well placed to benefit with sales expected to materially add to the Company’s growing revenue profile.
Management Commentary
Non-executive Chairman, Adam Blumenthal said:
“Entering the US market with a high calibre partner such as CERES is a major achievement for Creso Pharma and we look forward to working with the group to outline a progress of the launch of anibidiol® across the country.”
“Importantly, CERES has an established distribution footprint and relationships with over 50,000 stores across the country, as well as a track record of scaling up its own branded products and international offerings. To this end, we are very confident that our animal health products will be well received.”
“We will continue to monitor regulatory and policy shifts in the US to ensure the Company and CERES are primed for launch and expect first sales to add to the Company’s revenue streams.”
“Creso has a number of exciting growth initiatives across all key operating business pending and we look forward to updating shareholders as they materialise in the coming months.”
CERES Executive Director, Shayne Lynn added:
“We are excited to partner with Creso Pharma to introduce the Company’s industry leading animal healthcare products to the US market. We continue to witness rapid demand for CBD and hemp based pet health products through our network and anticipate anibidiol® to be very well received.”
“We look forward to working with Creso’s management team to explore additional growth opportunities which will benefit both parties and create a long term, value accretive partnership.”
-Ends-
[1] https://www.grandviewresearch.com/industry-analysis/cannabidiol-pet market#:~:text=b.,USD%2037.37%20million%20in%202020
Authority and Contact Details
This announcement has been authorised for release by the Board of Creso Pharma Limited.
For further information, please contact:
Investor Enquiries
EverBlu Capital
E: [email protected] P: +61 2 8249 0000
Released through:
Ben Jarvis, Six Degrees Investor Relations: Ph: +61 (0) 413 150 448
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
About CERES Natural Remedies
Ceres Natural Remedies is one of Vermont’s premier most successful retailers and distributors of hemp derived CBD products. Offering New England’s largest selection of CBD products for plant-based health and wellness, CNR offers over 50 brands of extracts, capsules, edibles, pet and body care products made from hemp. Ceres Natural Remedies brings together artisanal quality and science- based healing through local and national brands like Mary’s Nutritionals Medicinals, Social CBD Charlotte’s Web, CBD Medic and more. Visit them online at www.ceresremedies.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.
IMPORTANT NOTICE AND DISCLAIMER
PAID ADVERTISEMENT
This communication is a paid advertisement. ValueTheMarkets is a trading name of Digitonic Ltd, and its owners, directors, officers, employees, affiliates, agents and assigns (collectively the “Publisher”) is often paid by one or more of the profiled companies or a third party to disseminate these types of communications. In this case, the Publisher has been compensated by CRESO PHARMA LTD. to conduct investor awareness advertising and marketing and has paid the Publisher the equivalent of five hundred thousand USD to produce and disseminate this and other similar articles and certain related banner advertisements. This compensation should be viewed as a major conflict with the Publisher’s ability to provide unbiased information or opinion.
CHANGES IN SHARE TRADING AND PRICE
Readers should beware that third parties, profiled companies, and/or their affiliates may liquidate shares of the profiled companies at any time, including at or near the time you receive this communication, which has the potential to adversely affect share prices. Frequently companies profiled in our articles experience a large increase in share trading volume and share price during the course of investor awareness marketing, which often ends as soon as the investor awareness marketing ceases. The investor awareness marketing may be as brief as one day, after which a large decrease in share trading volume and share price may likely occur.
NO OFFER TO SELL OR BUY SECURITIES
This communication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security.
INFORMATION
Neither this communication nor the Publisher purport to provide a complete analysis of any company or its financial position.
This communication is based on information generally available to the public and on an interview conducted with the company’s CEO, and does not contain any material, non public information. The information on which it is based is believed to be reliable. Nevertheless, the Publisher does not guarantee the accuracy or completeness of the information. Further, the information in this communication is not updated after publication and may become inaccurate or outdated. No reliance should be placed on the price or statistics information and no responsibility or liability is accepted for any error or inaccuracy. Any statements made should not be taken as an endorsement of analyst views.
NO FINANCIAL ADVICE
The Publisher is not, and does not purport to be, a broker-dealer or registered investment adviser or a financial adviser. The Publisher has no access to non-public information about publicly traded companies. The information provided is general and impersonal, and is not tailored to any particular individual’s financial situation or investment objective(s) and this communication is not, and should not be construed to be, personalized investment advice directed to or appropriate for any particular investor or a personal recommendation to deal or invest in any particular company or product. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC, SEDAR and/or other government filings. Investing in securities, particularly microcap securities, is speculative and carries a high degree of risk. Past performance does not guarantee future results.
FORWARD LOOKING STATEMENTS
This communication contains forward-looking statements, including statements regarding expected continual growth of the featured companies and/or industry. Statements in this communication that look forward in time, which include everything other than historical information, are based on assumptions and estimates by our content providers and involve risks and uncertainties that may affect the profiled company’s actual results of operations. These statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results and performance to differ materially from any future results or performance expressed or implied in the forward-looking statements. These risks, uncertainties and other factors include, among others: the success of the profiled company’s operations; the size and growth of the market for the company’s products and services; the company’s ability to fund its capital requirements in the near term and long term; pricing pressures; changes in business strategy, practices or customer relationships; general worldwide economic and business conditions; currency exchange and interest rate fluctuations; government, statutory, regulatory or administrative initiatives affecting the company’s business.
INDEMNIFICATION/RELEASE OF LIABILITY
By reading this communication, you acknowledge that you have read and understand this disclaimer in full, and agree and accept that the Publisher provides no warranty in respect of the communication or the profiled company and accepts no liability whatsoever. You acknowledge and accept this disclaimer and that, to the greatest extent permitted under applicable law, you release and hold harmless the Publisher from any and all liability, damages, injury and adverse consequences arising from your use of this communication. You further agree that you are solely responsible for any financial outcome related to or arising from your investment decisions.
TERMS OF USE AND DISCLAIMER
By reading this communication you agree that you have reviewed and fully agree to the Terms of Use found here https://www.valuethemarkets.com/terms-conditions/ and acknowledge that you have reviewed the Disclaimer found here https://www.valuethemarkets.com/disclaimer/. If you do not agree to the Terms of Use, please contact valuethemarkets.com to discontinue receiving future communications.
INTELLECTUAL PROPERTY
All trademarks used in this communication are the property of their respective trademark holders. Other than valuethemarkets.com, the Publisher is not affiliated, connected, or associated with, and the communication is not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by the Publisher to any rights in any third-party trademarks other than valuethemarkets.com.
AUTHORS: VALUETHEMARKETS
valuethemarkets.com and Digitonic Ltd and our affiliates are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above. This article does not provide any financial advice and is not a recommendation to deal in any securities or product. News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance.
ValueTheMarkets do not hold any position in the stock(s) and/or financial instrument(s) mentioned in the above piece. ValueTheMarkets have been paid to produce this piece by the company or companies mentioned above. Digitonic Ltd, the owner of valuethemarkets.com, has been paid for the production of this piece by the company or companies mentioned above.
