Creso Pharma (ASX:CPH) has signed a three-year supply agreement with TerrAscend Canada to provide its cannabis product to help meet the significant consumer demand driven by that country's legalisation of cannabis in October last year.
TerrAscend has agreed to purchase a minimum of 100 kilograms of cannabis flower per month from Creso from the date the company is licensed to sell cannabis under Canadian laws.
Creso said pricing is determined on a sliding scale depending on the grade and quality of the flower and also whether it has been grown to a GMP standard.
“Creso is ticking off each step in its strategic plan and quietly building a diverse global enterprise," said Creso chief operating officer, John Griese.
"Few cannabis companies are currently commercial in countries across Europe and even less have established proprietary branded products such as Creso’s CBD based Nutraceuticals cannaQIX and anibidiol in human and animal health.
“As a result of supply agreements like the one with TerrAscend, Creso now enters the Canadian market place with committed revenues from product destined for the legal cannabis markets."
Creso has recently completed a greenfield and GMP standard cultivation facility in the Canadian province of Nova Scotia.
It currently accommodates a two-tier grow room structure with the capacity to yield in excess of 4,000 kilograms of cannabis annually. The facility has significant capacity to expand.
Creso recently announced its upcoming listing on the Toronto Stock Exchange (TSX-V). It said it plans to use the funds raised to assist in the further commercial expansion of its human and animal CBD products.
"We are pleased to be working with Creso given their expertise in cultivation, propagation and product development," said CEO of TerrAscend, Dr Michael Nashat.
"Creso’s state-of-the-art production facility makes them an ideal partner to support TerrAscend’s growth trajectory and commitment to the best-in-class products and formulations.”
“This agreement is the result of a long history of positive conversations with TerrAscend," said Creso CEO and co-founder, Dr Miri Halperin Wernli.
"We believe our missions are complementary and that opportunity beyond supply will strengthen both organisations. Confirming revenues for our dried flower supports a successful entrance into the Canadian cannabis space."