Creso Pharma Ltd (ASX:CPH) (FRA:1X8) has signed a bilateral commercial agreement with Cannabis Queen, South Africa, to market and distribute Creso’s cannaDOL topical line and cannaQIX® tea range in African countries.
This agreement will also see Creso Pharma market and distribute Cannabis Queen’s anti-ageing Serum 30ml and Argan & Cannabis Hair Treatment 50ml products in Switzerland and Europe.
Creso Pharma plans to sell these products through its existing distribution network of more than 2,100 points of sale including pharmacies, drugstores and retail chains to consumers in Switzerland, with additional European territories earmarked for near-term expansion.
Similarly, Cannabis Queen will sell Creso Pharma products to its wholesale and retail network of more than 1,000 points of sale.
Leveraging established reputation
Creso Pharma’s CEO for Swiss international operations Jorge Wernli said: “We are very proud to be able to market and distribute our topical products in the African continent with Cannabis Queen, South Africa.
“The group has an established footprint and reputation, which we will be able to leverage to drive growth and increase visibility in a strategic and emerging market.
“This agreement also represents a meaningful strategic complementation of the current Cannamics (cannaQIX®) business with our very successful partner Pharma Dynamics South Africa.”
Shares of the company, which has a market cap of approximately A$231.4 million have been up as much as 5% to A$0.205 intra-day.
Cannabis Queen is a skincare company based in Johannesburg, South Africa. It was established in May 2019 following a decision by South Africa’s Department of Health which made cannabidiol available for consumer use in the country.
Cannabis Queen became one of the first companies of its kind in South Africa and has a range of CBD-based topical products that are made from full-spectrum CBD oil and advanced formulas with enriched botanicals.
According to the African company, its raw materials are ethically sourced and the group’s products are highly effective compare to its competitor’s products.
Terms of agreement
The agreement is non-exclusive on either party and has an initial term of one year which will automatically renew unless:
- Either party notifies the other of their decision to not renew the agreement within 90 days before the expiry of the Initial or Renewal Term; or
- The parties do not enter into a further definitive agreement on or before September 30, 2021.
As part of the agreement, Cannabis Queen will market and distribute CannaDOL and Creso Pharma’s recently launched CBD-based products through multiple channels including its established online store, direct to consumer sales, retail distributors, specialist wellness shops, beauty salons and spas and pharmacies.
Creso Pharma’s CBD-based tea products have been introduced under the CannaQIX® brand and include cannaQIX® tea, cannaQIX® NITE tea and cannaQIX® Immunity tea.
The agreement provides Creso Pharma with an established footprint into the African market and de-risks the launch of new products the company brings to market.
Sale of African product in Europe
Creso Pharma will market and distribute Cannabis Queen’s anti-ageing Serum 30ml and Argan & Cannabis Hair Treatment 50ml products initially in Switzerland.
The company’s established distribution footprint in excess of 2,100 points of sale across Switzerland
Includes pharmacies, pharmacy networks, drugstores, health nutrition shops and large retail groups including leading department store chain Manor.
Creso also supplies all major wholesalers in the country including Galexis, Amedis and Voigt.
Wernli said: “We also look forward to initiating marketing and distribution initiatives for the Cannabis Queen skin and hair products further optimising the company’s high-quality value proposition to our end-customers.”