Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) has completed the acquisition of Health House International Limited (ASX:HHI), an international pharmaceutical distributor, specialising in the distribution of medicinal cannabis products in Australia and other international markets.
The acquisition of HHI brings substantial benefits to the company, strengthening its position in the Australian and international markets.
By leveraging HHI's expertise and established network, Creso Pharma will gain a competitive edge in the distribution of medicinal cannabis products, positioning itself as a key player in this rapidly expanding industry.
In terms of financial impact, the combined revenues of Creso Pharma and HHI, with cash receipts serving as a proxy, have resulted in unaudited pro forma revenue of A$8.26 million.
The acquisition highlights the company's commitment to advancing its commercial presence in the Australian market, in response to the Therapeutic Goods Administration's (TGA) indication that medicines containing psilocybin and MDMA could be prescribed by authorised psychiatrists for the treatment of specific medical conditions starting from July 1, 2023.
“Considerable sales growth”
Creso CEO and managing director William Lay said: “We are very pleased to have completed the acquisition of Health House and look forward to providing shareholders with further updates on its integration into the broader Creso Pharma Group over the coming weeks.
"In a short period of time, HHI has demonstrated its ability to generate considerable sales growth and as part of the broader Creso Pharma Group, we are confident that we can scale this significantly.”
Revenue-generating business unit
The acquisition provides Creso Pharma with another revenue-generating business unit, as well as operations focused on the international distribution of medicinal cannabis and a number of strategic licenses to store, distribute, import, export and sale of controlled drugs.
HHI generated A$5.95 million in cash receipts for the three-month period ended March 31, 2022, which marked a 10.1% increase on the prior period and a 36.4% rise on the prior comparative period.
HHI has also formally lodged applications in Australia for state licence amendments to import and distribute medicines containing psilocybin and MDMA for either clinical trial purposes or certain mental health conditions under authorised psychiatrists.
This provides Creso Pharma with another potential pathway to unlock value in the growing Australian psychedelics industry.