It has been a volatile morning for the Creso Pharma Ltd (ASX: CPH) share price after returning from a trading halt.
After being up as much as 5.5% to 19 cents, the cannabis and psychedelics company's shares are now down 9% to 16.3 cents.
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Why was the Creso Pharma share price in a trading halt?
Creso Pharma requested a trading halt on Wednesday pending the release of a "material operational update" in relation to its proposed acquisition target, Halucenex Life Sciences.
This morning the company revealed that the material development that required a two-day trading halt was that Halucenex Life Sciences has secured an additional 10 grams of synthetic psilocybin from its manufacturing partner. Combined with its existing inventory, Halucenex Life Sciences now has total pharmaceutical grade psilocybin of 22.3 grams.
As small as this sounds, this still makes it one of the largest holders of single batch GMP grade synthetic psilocybin in Canada. According to the release, the psilocybin will be used in research and development initiatives and future clinical trials.
Management commentary
Judging by the weakness in the Creso Pharma share price, investors appear underwhelmed by this announcement.
Nevertheless, Creso Pharma's Non-Executive Chairman, Adam Blumenthal, believes it is an important development.
He commented: "Halucenex is now one of the largest holders of single batch GMP grade synthetic psilocybin in Canada. This is a major development and opens a number of doors for Halucenex in medium and long term."
"Once it secures its licence from Health Canada, Halucenex will have the capacity to progress a number of R&D initiatives, which have the potential to unlock new drug delivery methods and combinations, potentially leading to a higher level of care through alternative treatment methods. We look forward to working with Halucenex and its existing partners to progress these research initiatives."
"Halucenex and the Creso group more broadly continues to make steps forward. We have achieved a number of regulatory hurdles in regards to the proposed US OTC listing and anticipate DTC eligibility shortly. This will unlock considerable benefit for shareholders. We are very excited to share some of the developments the Company has been working on in the coming months," he concluded.
