Creso Pharma (ASX:CPH) stock price jumped 6% today. here’s why

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Key points

  • Creso Pharma share price exploded this morning before ending the day up 6%
  • It acquired a US-based company making both CBD and non-CBD products
  • Creso Pharma share price fell 57% in 12 months

the Creso Pharma Ltd. (ASX:CPH) The stock price soared today after the company announced it would enter the US market.

The cannabis-focused healthcare company has revealed it will acquire Colorado-based consumer packaged goods company Sierra Sage Herbs, LLC.

Creso Pharma’s share price jumped 16% to 9.9 cents in early trading before falling back to 9 cents, a 5.88% gain from yesterday’s close.

So what does this acquisition mean for investors?

Let’s read on…

What drove the Creso Pharma share price?

Creso Pharma stock price jumped on today’s announcement. The company is now well positioned to enter the US market with the acquisition of the already established US company, Sierra Sage Herbs, and more of the Green Goo brand.

Its product portfolio includes beauty and personal care products, first aid, sexual wellness products (without CBD) and CBD products. The line already has 90,000 points of sale and a large direct-to-consumer base inside and outside the United States.

Creso Pharma considers the US CBD market to be “large and rapidly growing”, and estimates it will reach $12 billion by 2026.

The company will acquire SSH for an initial purchase price of $21 million (with additional future payments based on estimated revenue targets of $10 million in 2022 and up to $20 million in 2023).

Creso Pharma aims to leverage and grow Green Goo’s existing customer base and introduce them to its own line of products, including therapeutics, nutraceuticals, topicals and pet foods.

Management comment

Speaking on the Creso Pharma share price news today, Group CEO and Managing Director William Lay said:

The acquisition of Sierra Sage Herbs and the company’s product line is a significant milestone for Creso Pharma. It marks entry into the US CBD market and provides a solid foundation for rapidly expanding operations, product development and sales, and other M&A transactions.

Creso Pharma should benefit from existing SSH revenue streams. We expect sales of SSH’s products to continue to grow significantly in the years to come, and the transaction implies a significant increase in several parameters for Creso Pharma. Combined with our existing sales channels, we have the potential to significantly increase our near-term profit profile.

Jodi Scott, CEO and Co-Founder of Sierra Sage Herbs, said:

We started this business because we knew plant-based alternatives could do more. We combined our passions for science, wellness, herbalism, and wound care into a line of all-natural, safe, and effective products, and that’s how we began our journey to change first aid. as we know them.

This seed has become one of the most disruptive CPG brands in personal care – and we’re just getting started.

Creso Pharma Share Price Overview

Over the past 12 months, the Creso Pharma share price has fallen by 57%. However, it is up almost 10% this year to date.

The company has a market cap of $104.40 million and 1.23 billion shares issued.

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