There's cause to celebrate for creso pharma, after the company kicked off sales at its Mernova facilty
The Australian medicinal cannabis company, Creso Pharma Limited (ASX:CPH), has announced the commencement of cannabis sales from its new Nova Scotia-based Mernova Medical facility.
Sales of dried flower from the first harvest are part of a multi-year agreement that the company has signed, which will see revenue from the facility increase from C$150,000 to more than C$5 million by the end of 2019.
The milestone was achieved following creso pharma's receipt of the necessary cultivation licenses in mid-February 2019, which will allow for the official commencement of commercial cultivation and B2B sales.
To meet the growing demand for high quality cannabis products, creso pharma has confirmed that it will produce two specific strains for wholesale B2B clients at its Halifax facility. This will be complimented by an additional five strains—pending sales license approval—that will be aimed purely at the retail market.
The company's management is confident in its ability to facilitate a commercial offering on this scale, as its purpose-built Mernova facility is predicted to generate approximately 700,000 grams of dried flower by the end of 2019.
Results from the Mernova facility show that the company is also capable of producing some extremely high-quality cannabis. Recent harvests have been delivering spectacular results, with THC levels of 22.6% and 23.2% reported.
The Co-Founder and CEO of Creso Pharma, Dr. Miri Halperin-Wernli, identified the launch of Canadian sales as an important milestone for the company.
"Commencing sales at our Mernova facility in Canada marks an important milestone. We are now generating revenue in multiple markets. Canadian demand is rapidly growing and we are well positioned to help meet this demand."
– CEO and co-founder of creso pharma, Dr. Miri Halperin-Wernli
"Complementing the dried flower approach of Mernova, going forward as part of Pharmacielo (TSXV:PCLO) will provide access to high quality, low cost CBD and THC oil for all our proprietary products and markets," Halperin-Wernli said.
Creso Pharma has plans to eventually increase the production capacity of the Mernova facility to 4,000 kilograms of cannabis per year.
The company claims that there is additional expansion capacity at the facility which could allow "for future increases of up to 10 times that amount". This is because the 24,000 square foot facility in Canada was originally designed to house a "two-tier" grow room approach, however thus far creso pharma has only put one tier in place.
Once the grow room's second tier has been established it will dramatically increase the overall footprint of the facility, boosting its' production capacity by up to 60%. The company already has plans in place to capitalise on this increase in capacity, with an initial lighting power upgrade to take place in the near future in aid of it. Construction of the second tier grow rooms is expected to continue over the summer.
According to the COO of Creso Pharma, John Griese, "this facility was built to produce high quality cannabis and the facility and our team has not disappointed."
"We were pleased to receive independent lab confirmation that our strains produced high THC level and terpene rich flowers."
"We are now focused on maximising yield and increasing overall capacity of the facility," Griese said.