Why the Creso Pharma Ltd share price rocketed 7.5% today

After a series of declines, the Creso Pharma Ltd (ASX: CPH) share price has bounced back to life today and has been one of the biggest movers on the market in morning trade.

At the time of writing the medicinal cannabis company’s shares are up 7.5% to 42.5 cents.

What happened?

This morning Creso announced that it has signed a letter of intent with Switzerland-based Cannapharm AG to provide patients in the Asia-Pacific and Latin America access to high quality medicinal cannabis products.

These countries include Australia, New Zealand, China, Brazil, Chile, Colombia and Mexico. The products will be used to treat a variety of conditions as approved by prescribing physicians under relevant local legislations.

Creso’s management believes this gives the company a first-mover advantage in exporting best-in-class pharmaceutical-grade medicinal cannabis products.

Should you invest?

Today’s news is undoubtedly a big step forward for the company. If it does result in a first-mover advantage then Creso could be in a great position to profit if medicinal cannabis products become the norm.

While I do like Creso and rival Auscann Group Holdings Ltd (ASX: AC8) and believe they have significant potential, I’m holding off an investment in the industry until such a time that medicinal cannabis becomes more accepted by prescribing physicians.

In the meantime I think an investment in one of these quality blue-chip shares which have been growing like wildfire could be a great option for investors.

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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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