The Creso Pharma Ltd (ASX: CPH) share price has been a very strong performer on Thursday.
In early trade, the cannabis and psychedelics company’s shares are up 15% to 15 cents.
Why is the Creso share price surging higher?
Investors have been bidding the Creso Pharma share price higher this morning following the release of an update on an acquisition.
According to the release, the company has completed the acquisition of Canadian psychedelics company Halucenex Life Sciences following a period of due diligence.
Management believes the acquisition marks an important milestone, as it provides direct access to the emerging psychedelic-assisted psychotherapy (PAP) sector. It also notes that it unlocks a number of near term opportunities and access to additional lucrative market verticals.
Management highlights that there has been a growing body of evidence demonstrating that psychedelic medicines are safe and non-addictive when used in medical settings. In a number of clinical trials completed in recent years, psychedelic-assisted psychotherapy has produced some significant, long-lasting clinical outcomes for individuals living with mental health conditions.
It feels there is potential for psychedelic-assisted therapy to be commercialised as a safe and effective treatment which provides a solution to the growing global mental health crisis.
Creso’s Non-executive Chairman, Adam Blumenthal, was very pleased with the news.
He said: “Completing the acquisition of Halucenex is a major milestone for Creso Pharma and we will now pursue a number of near term value creation strategies through the subsidiary and in preparation of the proposed merger with Red Light Holland.”
“This acquisition has allowed Creso Pharma to emerge as a best-in-class provider of cannabis, cannabinoids and alternative psychedelics solutions to meet a large and unmet demand to improve mental health and wellbeing.”
Despite this strong gain, the Creso Pharma share price is still down 16% since this time last month. Concerns over the aforementioned proposed merger with Red Light Holland have been weighing heavily on the Creso Pharma share price.