The market may be tumbling lower again on Thursday, but the same cannot be said for the Creso Pharma Ltd (ASX: CPH) share price.
In afternoon trade the cannabis company's shares are up a sizeable 16% to 22 cents.
This gain means the Creso Pharma share price is now up over 250% since this time last year.
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What is driving the Creso Pharma share price higher today?
The strong gain by the Creso Pharma share price today appears to have been driven by investors taking advantage of a recent pullback.
In fact, although they have jumped 16% today, the company's shares are still trading below the high they reached on Monday morning of 23 cents.
What's been happening?
Interestingly, investors have been selling the company's shares since it announced an acquisition earlier this week. This could be a sign that some are not convinced by Creso Pharma's foray into the psychedelics market.
According to that announcement, the company has signed an agreement to acquire Halucenex Life Sciences. It is a Canada-based psychedelics company focused on developing treatments for Treatment Resistant Depression in individuals suffering from PTSD, and other mental health illnesses.
Management notes that the acquisition provides Creso Pharma with direct entry into the emerging psychedelic medicines market, creating a diversified natural medicines company to improve mental health and wellness.
It believes the combined group will allow the Halucenex business to benefit from a number of significant synergies, ultimately fast tracking the company to early revenues.
"A major milestone"
Creso Pharma's Non-Executive Chairman, Adam Blumenthal, is very positive on the acquisition and believes it is a major milestone for the company.
He said: "This is a major milestone for Creso Pharma and marks our evolution into a broader based pharmaceutical business. Creso will now sell its trusted cannabis products and progress the commercialisation of a range of psychedelic-assisted psychotherapy treatments. Our entry into this market provides the Company with another lucrative vertical and an additional near term revenue stream."
"Mental health and PTSD are becoming detrimental to our society and this has been highlighted in the last 12 months. These conditions have been exacerbated by COVID-19 and the available treatments are shown to have limited effectiveness and many side effects. Psychedelic-assisted therapy is a new alternative treatment route, which has considerable promise."
"The acquisition of Halucenex will strengthen our presence in Canada, as well as provide a number of opportunities in drug development which will inevitably lead to further new market entries and commercialisation opportunities."
