The Creso Pharma Ltd (ASX: CPH) share price has continued its remarkable run on Wednesday.
At the time of writing, the cannabis company's shares are up a massive 96% to a 52-week high of 46 cents.
This means the Creso Pharma share price has now rocketed an incredibly devilish 666% since this time last week.
This takes the company's market capitalisation beyond $300 million.
Image source: Getty Images
Why is the Creso Pharma share price rocketing higher?
There are a couple of catalysts for the stunning rise in the Creso Pharma share price.
The first is news over the last few days that the UN has announced a landmark decision to reclassify cannabis as a less dangerous drug and the US House of Representatives has voted to decriminalise cannabis.
Co-founder and Director, Boaz Wachtel, commented: "Creso is very well positioned to capitalise on opportunities arising from the market in the USA, including expanding distribution of its existing cannabis products through the scale up its operations in Canada and Switzerland. As a listed vehicle with access to capital, Creso is also an attractive partner for merger and acquisition opportunities, and, following the appointment of Canopy Growth Founder, Bruce Linton to Creso earlier this year, the Company looks forward to exploring such opportunities for the benefit of its shareholders."
Canada expansion.
Also giving the company's shares a boost was the release of an announcement this morning.
Creso Pharma has announced plans to expand into Canada's largest recreational market. This follows the receipt of orders worth ~C$230,000 from the Province of Ontario and a maiden purchase order from the Yukon Liquor Corporation.
The company notes that these orders open potential opportunities for new Canadian markets in Ontario and the Yukon, which have recorded combined sales for recreational cannabis of over C$300 million for year to date.
Management commented: "We are proud to announce that Mernova has been chosen to become part of a very select group of licensed producers with cannabis products for sale in the Yukon. This is a major achievement for us, and we expect growth to continue across Canada and, with our pending entry into Ontario, Canada's largest recreational market, we expect rapid growth to continue."
Creso Pharma placement.
Interestingly, prior to the Creso Pharma share price rocketing higher this month, the company had announced a $6 million placement comprising 250 million shares at an issue price of just 2.4 cents.
Based on a share price of 46 cents, those 250 million shares now have a value of $115 million.
Unfortunately for those that were due to take part in this placement, the vote to approve this placement hasn't happened yet and they've missed out on these stellar gains.
Though, they still stand to benefit from a significant discount if shareholders approve the issue on 23 December.
Last month, Creso explained: "The quantum of future placement shares to be issued is based on a maximum amount to be raised of $6,000,000, at an issue price which will not be less than 75% of the 15 trading day VWAP immediately before the date on which the issue price is agreed by the Company."
A 75% discount to the current share price would be approximately 11.5 cents per share.
Though, it wouldn't be at all surprising if the company scrapped this placement and launched a much larger capital raising to take advantage of this significant share price increase.
