Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) has increased its footprint in Canada following its wholly-owned subsidiary, Mernova Medicinal Inc’s expansion into Manitoba and this comes hot on the heels of Mernova securing its largest-ever purchase order to date, valued at A$350,244.65 (C$326,793) from the Nova Scotia Liquor Corporation (NSLC).
Mernova now has a presence in six Canadian provinces as demand grows for its high-quality recreational cannabis products from consumers and provincial partners.
Following Mernova’s expansion, Creso now has a presence in 60% of Canada’s provinces with additional market entries pending. It also gives it access to another large addressable market opportunity, allowing it to potentially service a wide range of customers across 170 cannabis retail stores in the province.
Manitoba expansion
Mernova has moved into Manitoba following consultation and registration processes with the Manitoba Liquor & Lotteries Corporation (MBLL), which is a Crown corporation in the province.
The province mandated MBLL in 2017 to oversee and track the supply and distribution of non-medical cannabis. This includes management of the wholesale purchase and distribution of recreational cannabis for sale to retailers in the province and coordinates with licensed producers to provide a direct-to-retail store product delivery model.
Successful consultation has led to Mernova listing a total of 39 stock-keeping units (SKU) from its Ritual Green, Ritual Sticks and Ritual Gold product ranges.
Items for sale now include dried flower products, electronic vaporisers and pre-rolled joint ranges.
Additional sales from the province will also assist Mernova as it continues towards profitability in FY2023.
"A major milestone"
“The expansion into Manitoba is a major milestone for Mernova. It broadens the group’s exposure for recreational cannabis sales to 60% of Canada’s provinces and will unlock another revenue-generating opportunity,” CPH CEO and MD William Lay said.
“Having 39 SKUs listed with MBLL will allow cannabis retailers in Manitoba the ability to gain an understanding and feel for Mernova’s high-quality cannabis products, which we are confident will be well received by consumers.
"We look forward to providing additional updates on first purchase orders from the province during the quarter."
Largest purchase order
A further milestone is the receipt of its largest purchase order (PO) to date from the NSLC valued at A$350,244.65 (C$326,793).
The PO consists of several SKUs recently listed in Nova Scotia.
Mernova will deliver the PO in February 2023 with the recently listed products expected to be made available to consumers by March this year.
This PO takes Mernova’s confirmed POs for Q1 2023 to A$738,100 (C$689,813) and makes it the most productive month in Mernova’s operating history.
The value of the purchase order highlights the ongoing demand Creso Pharma is witnessing for its high-quality recreational cannabis products and will underpin revenue growth during FY2023.
“Further, to have secured the largest purchase order since the company’s inception from the NSLC shows Mernova’s ability to establish itself in a competitive market and grow its footprint," Lay added.
"Demand for our products continues to increase across Canada and we anticipate sales will continue to grow in 2023.”