Of ASX cannabis shares, Creso Pharma Ltd (ASX: CPH) shares have taken the spotlight recently after running more than 300% this month. Today, however, at the time of writing, the Creso share price has fallen 4.17% to 23 cents. This comes despite the company announcing that its subsidiary, Mernova, has secured a supply agreement with the Ontario Cannabis Retail Corp.
Historic milestones for cannabis this month
In addition to the surging Creso share price, other ASX cannabis shares have also delivered better than double digit returns following historic legal milestones for the consumption of cannabis this month. Earlier in December, the United Nations Commission on Narcotic Drugs (CND) voted to accept the World Health Organisation's (WHO) recommendation to reschedule cannabis.
The passage came under the WHO recommendation, which recognised the medical value of cannabis, and will see the product removed from Schedule IV of the 1961 Convention. Schedule IV is reserved for substances with "particularly dangerous properties" and little or no therapeutic value. The vote acknowledges the medicinal usefulness of cannabis and clarifies that CBD is not under international drug control.
This also follows the landmark ruling from the European Union's highest court, the Court of Justice of the European Union. It ruled that cannabidiol is not a narcotic as it does not appear to have any psychotropic effect or harmful effect on human health.
Creso share price falls despite new agreement
The Creso share price is dropping lower today despite the company announcing its wholly owned subsidiary, Mernova, has secured the Ontario Cannabis Retail (OCR) Corporation supply agreement. Ontario is Canada's largest recreational cannabis market and the region's monthly revenues from cannabis sales during September 2020 were C$77.9 million. This represents over 30% of Canada's total monthly sales volume of cannabis.
Under the agreement, Mernova will supply OCR with a range of its high quality, artisanal cannabis strains HPG13, Lemon Haze and Minosa. Its products will be sold through established stores and through the OCR online sales platform.
Mernova Managing Director Jack Yu had this to say of the agreement:
This is a huge step forward towards selling our high quality products in Canada's largest market. To be able to compete in a market with over C$385m in sales between April 2019 and March 2020, which continues to grow, as evidenced by over $80m in sales this past September alone, is a huge opportunity for us and we look forward to firmly establishing ourselves as one of the premier cannabis producers in the country.
