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Why the Creso Pharma Ltd share price has bolted higher today

Thankfully for its shareholders, the Creso Pharma Ltd (ASX: CPH) share price is heading in the right direction at long last.

At the time of writing the pot stock is up 4.5% to 50.2 cents, reducing its 30-day decline to around 34%.

Why has it jumped?

Investors have been snapping up shares today after the company announced that it has signed a strategic agreement with leading Australian medicinal cannabis producer LeafCann.

According to the release, LeafCann will supply Good Manufacturing Practice-standard cannabis and hemp-derived materials to the company. These will then be used to produce therapeutic products for both the human and animal health markets.

Management believes this partnership advances Creso’s leadership position in the growing Australian medicinal cannabis industry, placing it well to capitalise on the growth in the market following recent federal and state legislative changes.

Should you invest?

Creso Pharma is focused on developing products for the treatment of anxiety, epilepsy, chronic pain, osteoarthritis, and osteoporosis.

These are lucrative markets and could provide strong sales for the company if it is successful. But it is worth remembering that it is early days and there’s a lot of work that will need to be done until these products are prescribed by doctors.

Like rivals Auscann Group Holdings Ltd (ASX: AC8) and Cann Group Ltd (ASX: CAN), Creso Pharma could have a bright future ahead of it. But for now it is just a little too early to make an investment in my opinion.

In the meantime investors might be better off taking a look at this explosive growth share instead.

A Big, Fat, Fully Franked Dividend

This company’s dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.

Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included. And in stark contrast to the likes of Commonwealth Bank and Telstra, this company just increased its dividend by over 13%, and guided for 2017 profits to grow by 20%!

Discover the name of this “new breed” of blue chip along with 2 others in our new FREE report "The Motley Fool’s Top 3 Blue Chips Stocks For 2017."

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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