The Creso Pharma Ltd (ASX: CPH) share price is shooting higher on Thursday following a positive development.
In morning trade, the cannabis and psychedelics company's shares are up 11% to 15.5 cents.
Why is the Creso share price shooting higher?
The catalyst for the rise in the Creso share price today has been a favourable regulatory shift in California.
This morning the company announced that it will expedite a Californian market entry following the recent passing of Senate Bill 519.
While the bill remains subject to further regulatory approval from California's lower house and the Governor of California, if signed into law, it could make a wide range of psychedelic substances, including psilocybin, legal to use and possess for adults over the age of 21.
The company notes that the bill was introduced to progress a more health-focused approach to the use of psychedelic compounds and to address the current mental health crisis in the United States. It also marks the ongoing push towards acceptance of psychedelic compounds as an alternative treatment route.
Creso is currently in the process of acquiring Halucenex Life Sciences, which specialises in psychedelic compounds.
Management commentary
Creso's non-executive Chairman, Adam Blumenthal, commented: "This is a major development for Creso Pharma and Halucenex and provides a key strategy piece, which will underpin our expansion into the US market."
"Over the recent months, we have made a number of US focused appointments and Halucenex have secured multiple partnerships and agreements that will allow the Company to pursue the US psychedelics market and become a first mover in the sector."
"The Board and management team are actively assessing a number of strategies to expedite a US market entry and will leverage our existing partnerships and technical experience in the psychedelics space to unlock further value for shareholders," he concluded.
Despite today's strong gain, the Creso share price is down a disappointing 22% since this time last month.
