The Creso Pharma Ltd (ASX: CPH) share price is having a fantastic day on the ASX.
The company's shares are soaring after it announced its subsidiary, Mernova, has been granted a medical cannabis licence in Canada. Mernova has also received a number of new purchase orders.
Right now, the Creso Pharma share price is 8% higher than its previous close. Shares in the company are swapping hands for 14 cents apiece.
Let's take a closer look at today's news from the pharmaceutical cannabis producer.
News from Mernova
The Creso Pharma share price is gaining today following news of Mernova's new sales licence.
Mernova can now sell medicinal cannabis products directly to customers.
In the past, Health Canada had only allowed the company to sell its medicinal products through wholesalers. Although, it was able to sell directly to recreational cannabis users.
Creso Pharma said that CA$500 million was spent on medicinal cannabis products in Canada in 2019.
The company also believes Mernova's new licence could create a recurring revenue stream.
The Creso Pharma share price is also likely being driven by news of purchase orders.
Mernova has recently received CA$224,580 ($242,546) worth of purchase orders for products under its Ritual Green and Ritual Sticks brands.
Mernova said the purchase orders highlight increasing demand for its recreational products.
Commentary from management
Mernova's managing director, Jack Yu, commented on the news from Creso Pharma today:
The direct-to-patient medicinal market has the potential to be huge for us. It increases our distribution channels from four provinces and territories to nation-wide, and allows for direct-to-patient sales, which provides us with increased control over pricing, as well as direct interaction with, and feedback from, valued customers…
Purchase orders for recreational sales continue to grow steadily, and we anticipate increased growth with the introduction of new strains and additional products, in the coming months.
Creso Pharma share price snapshot
Today's gains aren't enough to get the Creso Pharma share price back into the green.
The company's shares are currently trading for 25% less than they were at the start of 2021. However, they have gained 237% since this time last year.
The company has a market capitalisation of around $149 million, with approximately 1.2 billion shares outstanding.
