Creso Pharma subsidiary Mernova secures new purchase orders and launches new products
Creso Pharma Ltd’s (ASX:CPH) (FRA:1X8) wholly-owned Canadian subsidiary, Mernova Medicinal Inc has secured new purchase orders (POs) with a total value of C$145,192 (A$150,770) from the Ontario Cannabis Store (OCS) and Yukon Liquor Corporation. The new POs include a second from OCS and a third from Yukon Liquor Corp and highlight an ongoing shift towards a recurring revenue model for Creso Pharma. This new PO from the Yukon marks the second order for pre-roll joint range Ritual Sticks, which provides multiple growth opportunities for Mernova and access to a large potential customer base. It also includes the first order for the new Ritual Green one-ounce bag offering introduced by Mernova so consumers can secure a larger supply of its leading cannabis strains at a volume discount. “Major achievement” Mernova’s managing director Jack Yu said: “To have secured these new purchase orders is a major achievement for Mernova. “Particularly, the repeat order from OCS is very pleasing and our second order for Ritual Sticks in another new province highlights the significant potential the product has amongst consumers. “The pre-roll market segment is booming and offers Mernova a huge opportunity that we plan to capitalise on to the fullest. “We are very confident that we can leverage our growing reputation as a high-quality, artisanal, craft cannabis producer, to make headway into this market, and establish ourselves as producers of some of the best pre-roll joints in the country with our Ritual Sticks, as we’re currently doing with our Ritual Green brand, in the dried flower market.” New product Mernova’s new one-ounce bag product segment allows consumers to secure more high-quality product at competitive prices and also streamlines the company’s inventory and supply chain. This initial order is for Mernova’s Mimosa strain with other strains to potentially follow. Yu said: “We are also very happy to have launched our new one-ounce bag offering, which will allow consumers to purchase more of their favourite cannabis at competitive prices, by offering a volume discount. “The larger ounce offering will also allow the company to streamline its inventory practices, ensuring we retain the highest standard and quality of cannabis in our range of high-quality offerings.” Ritual Sticks brand Mernova sells its pre-roll joint range under the Ritual Sticks brand. The pre-roll products utilise the company’s top-quality indoor grown, hand trimmed, hang dried, cured, artisanal, craft cannabis sold under the Ritual Green segment. The Ritual Sticks range provides products for people that do not know how to roll their own joints, or simply prefer the convenience of having their joints pre-rolled for them. The pre-roll cannabis segment is a large addressable market for Mernova and also serves as an entry-level product that allows consumers to try Mernova’s high-quality strains at an affordable and attractive price point. Uptake in orders Mernova is witnessing strong uptake of its products across Canada and shorter intervals between purchase orders. The company is encouraged as this highlights Mernova’s strong brand recognition in a highly competitive market in Canada. Additional orders are expected in the near term, which underpins a positive outlook for the remainder of the financial year. Yu said: “As the time between purchase orders continues to decrease, Mernova continues on a track towards a stable and recurring revenue model. “We anticipate that this trend will continue and we remain very optimistic about our growth prospects over the coming months.” Creso Pharma shares have been as much as 6.5% higher today to A$0.207 while the company’s market capitalisation is approximately A$214.9 million.