Australian medical cannabis company Creso Pharma has agreed to acquire Canadian cannabis company Mernova Medicinal, who has applied to become the first licensed producer in Nova Scotia, for more than $8.1 million (A$10.2 million, C$10.18). Under current Canadian law, companies must prove they can cultivate cannabis crops before receiving a state license. Creso and Mernova will build a cultivation facility on 20,000-square-feet of land in Nova Scotia according to Good Manufacturing Practice guidelines.
Canadian producers are already permitted to export medical cannabis products to Australia in addition to other nations that accept medical cannabis imports.
Dr. Miri Halperin Wernli, Creso Pharma CEO and co-founder, said the deal allows the company “to rationalize and vertically integrate [their] supply and production chain” through the “100 percent owned GMP-quality cultivation and extraction facility.”
“This move gives Creso a number of strategic benefits, not only when it comes to expanding to overseas markets, but also when it comes to cultivating and manufacturing our own innovative medicinal cannabis products,” she said in a press release. “These will be standardized in dose and formulation, in innovative and proprietary delivery technologies, and will provide patients with new therapeutic choices beyond smoking or vaping.”
The company also produces nutraceuticals and hemp-based complimentary feed for companion and zoo animals.
The cultivation site could expand to 200,000 square feet and the company anticipates producing their first cannabis crop within 12 months of when the site goes online. Creso estimates revenue potential of the first crop between $12.7 million (A$15.9 million, C$15.8 million) and $25.4 million (A$31.8 million, C$31.7 million) per year.
The deal could also allow Creso to enter Canada’s federally-approved adult-use market, which is expected on July 1, 2018.