Creso Pharma (ASX: CPH) is the latest issuer to enter the US cannabis market. The company this morning announced that it has signed a non-binding letter of intent with Ceres Natural remedies to distribute and sell the firms CBD and hemp animal health products within the country.
Chief among the products to be distributed by that of Ceres is Creso’s anibidiol product, which is a hemp-based animal health product. The product is to be sold through the firms distribution network, which consists of several of its own dispensaries, as well as over 50,000 outlets across the United States. The company is targeting at least US$5.0 million in sales over a two year period, subject to federal legalization in the US.
Distribution of the product is to first focus on the markets of Vermont, New Hampshire, New York, Maine, Connecticut, Rhode Island and Massachusetts, with further stated targeted for future growth. Ceres is currently headquartered in Vermont, where it specializes in plant based remedies, CBD and hemp products for the US market.
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Notably, Ceres is a sister company to that of Champlain Valley Dispensary, the first licensed medical cannabis operator and only independent operator within the state. Both firms are subsidiaries of High Fidelity, whom currently operates two of five vertically integrated cannabis licenses in the state and currently services 70% of all registered medical cannabis patients in Vermont.
The non-binding letter of intent outlines a formal commercial agreement is to be entered into before April 1, 2021, which will define the terms of the distribution of anibidiol. The initial term is to be for one year, with an automatic renewal. Distribution is to take effect upon a federal legalization event.
Creso Pharma last traded at $0.21 on the ASX.
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