Creso Pharma Ltd’s (ASX:CPH) (FRA:1X8) wholly-owned Canadian subsidiary, Mernova Medicinal Inc has secured three new purchase orders with total value of C$177,122.40 (A$183,019.551), including a first purchase order for Mernova’s Pre-roll Joint range sold under the Ritual Sticks brand.
The first purchase order (PO) for Ritual Sticks valued at C$70,560.00 (A$72,890.24) was secured from Nova Scotia Liquor Corporation (NSLC) and marked the official launch of the product line in Canada.
This launch follows considerable product development initiatives, as well as a lengthy registration process with Health Canada.
Pre-roll Joints
Mernova’s Ritual Sticks offering comprises new Pre-roll Joints which utilise the company’s top-quality indoor grown, hand trimmed, hang dried, cured and artisanal craft cannabis.
To produce the line of Pre-roll Joints, Mernova utilises only the same high-quality cannabis that is sold under the Ritual Green brand.
The new Pre-roll Joints are expected to be available to consumers in the coming weeks.
Order “a major achievement”
Mernova’s managing director Jack Yu said: “Receiving our first PO for our Ritual Sticks brand of Pre-roll Joints is a major achievement for Mernova and is the result of considerable R&D to select the right equipment and develop our processes.
“We wanted to produce the best Pre-roll Joints possible and are very excited to get our new products in the hands of customers in the coming weeks so that they can provide their feedback.”
Large addressable market
The pre-roll market unlocks another significant addressable market for Mernova as the Ritual Sticks range will provide products for people who do not know how to roll their own joints, or simply want to avoid the inconvenience of rolling joints themselves.
Ritual Sticks will serve as an entry-level product that makes it more affordable for people to try Mernova’s high-quality strains and the company expectation is that once people try the products, a significant number will become repeat customers.
Yu said: “One thing that sets us apart is that we use only the same high-quality cannabis as sold under our Ritual Green brand of dried flower.
“We expect these products to open a much broader market for Mernova, as they are priced as entry-level products, which should help introduce our products to a much larger customer base, and they offer a level of convenience that many will appreciate.”
Strong Ritual Green uptake
Mernova has also received orders from the NSLC valued at C$61,022.40 (A$63,037.661) for its Black Mamba and Mimosa strains, sold under the Ritual Green brand.
This order demonstrates the strong uptake of Ritual Green in Nova Scotia, which is a large addressable market for the company.
The company anticipates that the launch of Ritual Sticks will add another revenue stream to Mernova’s growing sales profile and is also hopeful of getting additional purchase orders for new and existing product ranges that are expected in the near term.
Yu said: “Mernova continues to witness very strong sales growth and the additional purchase orders received recently are a validation of this.”
“Our brand recognition has increased considerably over the last few months, particularly in Nova Scotia, and Mernova has generated a reputation as one of the best craft cannabis growers in Canada.
“Most importantly, our ongoing sales growth has put the business on a fast track towards a stable, and recurring revenue-generating model.”
Additional orders
The company also received its third PO from Cannabis NB valued at C$45,540 (A$47,043.961) for the Ritual Green strains Lemon Haze and Mimosa.
Cannabis NB is the government-owned retail cannabis monopoly in the Atlantic Canadian Province of New Brunswick and it has an established footprint of 20 retail outlets and an online channel that generate significant cannabis sales.
Yu said: “We expect demand for our products to continue, particularly with the introduction of our Pre-roll Joint range, and we look forward to updating shareholders on new purchase orders in the near term.”