Creso Pharma Limited (ASX:CPH) has welcomed recent news highlighting that the US Democratic Party has won the balance of power in the US Senate, with this outcome increasing the likelihood of the decriminalisation of cannabis and the passing of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act.
The MORE Act aims to remove cannabis from the US Controlled Substances Act. The bill aims to erase certain federal convictions and essentially decriminalise cannabis for the first time on a national level.
The bill has already passed in the lower chamber 228 to 164 on Friday, 4 December 2020 and will now move to the Senate.
Legislation such as the MORE Act are expected to encourage private investors and larger corporate entities that have been hesitant to become involved in the US cannabis industry due to federal prohibition.
Recent Democratic election campaigns have been run on the promise of near term cannabis policy reform. News of a Democratic controlled senate will provide the necessary platform for any potential bills or legislation to be passed, which have the potential to considerably benefit Creso Pharma.
The company has an established global distribution network, as well as a wholly-owned Canadian subsidiary, Mernova Medicinal Inc. (“Mernova”), that can scale up operations to meet potential demand from the US market.
Mernova, which is Creso’s fully licenced 24,000 square foot cultivation growing facility, is only 220 miles from the US border, which is an ideal location to be able to cater to the Canadian and US market and will provide Mernova with immediate opportunities to benefit upon US federal cannabis legislation reform.
Non-Executive Chairman, Adam Blumenthal, said Creso is currently exploring several US market opportunities in anticipation of this potential legislation occurring. Further, as a listed vehicle with access to capital, Creso is also an attractive partner for merger and acquisition opportunities, Upon this legislation occurring Creso is confident in its ability to enter this large market swiftly.
The recent election result is a historic moment for the cannabis industry in the USA and these developments leave Creso very well placed to capitalise, should cannabis ultimately be decriminalised in the US through the passing of the MORE Act,” Mr Blumenthal said.
“Importantly, the decision reflects the changing sentiment towards cannabis and its CBD derived products in the USA. Creso has established distribution footprints in place, as well as an established product suite that it is able to quickly rolled out to satisfy large unmet demand from US customers.
“Our proximity to the US, through our wholly-owned subsidiary Mernova, provides a significant advantage for the Company and we look forward to any potential legislative changes that will unlock the US market.”