Australia’s ASX-listed Creso Pharma Limited (ASX:CPH) has announced a joint venture that will see it entering the cannabis market in Israel.
The company is teaming up with Cohen Propagation Nurseries Limited, which is aiming to cultivate cannabis in the country for medical purposes.
The arrangement will see the partners establishing and incorporating a joint venture to operate a medical cannabis growing facility, in which Creso have a 74% ownership interest.
Cohen is no stranger to greenhouse operations. Founded sixty years ago, it owns and operates farms across South and Central Israel with a total greenhouse capacity of 15.7 hectares.
Once the facility is operating at full capacity, Creso estimates annual production of up to 2,500 kilograms of cannabis annually. The company says the joint venture will save Creso at least 8 months of establishment and construction time, along with the costs associated with such activities.
Asaf Cohen has been granted a preliminary code for a cannabis licence, which the partners intend to assign to the joint venture; but this assignment must be approved by Israeli authorities. Assuming it is, construction work can then start on the cannabis growing facility, which is expected to take approximately 4 to 5 months to build.
“The Joint Venture with Cohen will expose Creso to leading cannabis research and innovation and will allow us to cultivate a high-quality crop at a very competitive cost,” said Creso Pharma’s Chief Executive Officer, Dr. Miri Halperin Wernli. “It’s a key step for Creso’s further vertical integration within our own ecosystem.”
The market seemed generally unimpressed with the news, with Creso’s shares closing on Wednesday lower than prior to the trading halt preceding the announcement.
Creso Pharma also has interests in other countries. It formally entered the Canadian market through the acquisition of Nova Scotia based Mernova.
Creso was the first company to import medicinal cannabis into Australia. The firm is developing products in five categories : therapeutics, animal health, nutraceuticals, skin care and lifestyle.
In other recent news from the company, Creso announced it would be expanding commercialisation of its animal food supplement Anibidiol after a successful launch in Switzerland last year. Anibidiol contains only trace amounts of THC, the hallucinogenic compound that can be harmful to pets, but is high in cannabidiol.
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