The Creso Pharma Ltd (ASX: CPH) share price is racing higher on Thursday following a positive announcement.
At the time of writing, the cannabis company's shares are up 6% to 20.7 cents.
What did Creso announce?
This morning Creso provided the market with an update on its Canadian subsidiary, Mernova Medicinal.
According to the release, Mernova Medicinal has secured new purchase orders valued at C$145,192 (A$150,770) from the Ontario Cannabis Store and Yukon Liquor Corporation.
The company notes that these orders include a repeat order from the Ontario Cannabis Store and the second order for its pre-roll joint range in a very short period. Furthermore, the new orders also include a maiden purchase order for Mernova's new one ounce bag offering.
Ontario Cannabis Store is the crown agency solely owned by the Province of Ontario. It reports directly to the Ministry of Finance and is the province's only retailer and wholesaler of legal recreational cannabis.
Positively, management appears to be expecting further orders in the near future. It advised that it continues to witness strong uptake of its products across Canada and shorter intervals between purchase orders.
It believes this is very encouraging and highlights the company's strong brand recognition in a highly competitive market.
Management commentary
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."
Mr Yu also sees a big opportunity for its new one-ounce bag offering.
"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," he concluded.
