Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF) is trading higher on signing a non-binding, non-exclusive Heads of Agreement (HoA) with one of Australia’s leading tattoo post-care companies Dr Pickles Pty Ltd, providing a potential pathway into the Australian body care market.
Under the agreement, the company’s target acquisition Sierra Sage Herbs LLC (SSH) intends to commercialise select products from its portfolio in the Australian market and, in turn, bring select products from the Dr Pickles range to North American markets.
Moving forward, Creso Pharma and Dr Pickles are working towards entering into and implementing a formal collaborative agreement on or before July 29, 2022.
Furthermore, the companies are targeting project development work to run concurrently within this timeframe with the first product introductions targeted in the September quarter.
“Multiple opportunities”
Creso CEO and managing director William Lay said: “We’re delighted to partner with Dr Pickles to launch our Green Goo body care products in Australia.
The group’s passion for bringing the highest quality products to consumers has propelled their success and makes them a perfect partner for Creso Pharma.
“We’re looking forward to working closely with the Dr Pickles team on exploring multiple product and branding opportunities which have the potential to drive sales for both parties.”
Shares have been as much as 17.31% higher intraday to A$0.061.
Synergistic relationship
With direct distribution into more than 800 tattoo studios across Australia, an e-commerce database of in excess of 20,000 direct customers and a sales network that extends through barbershops, pharmacies and Woolworths stores nationally, Dr Pickles is one of Australia’s largest and most popular tattoo aftercare product suppliers.
The initial focus is expected to be on the introduction of SSH’s tattoo aftercare and sunscreen products with broad scope to expand the product range.
In North America, SSH points of sale include leading pharmacy chains and major retail groups such as CVS, Walgreens, Rite Aid (NYSE:RAD), Albertsons Companies, Whole Foods, Walmart, Amazon US and Target.com amongst others.
Both parties are planning to explore further commercialisation options for current and future innovative products.
Dr Pickles managing director and co-founder Xenon Soden said: “We believe Green Goo and Dr Pickles share similar values.
“Both have proven business concepts based on well-known and much-loved brands in our respective jurisdictions.
“The response we have received from Australian consumers who have tried the Green Goo products has been incredibly positive.”
“We’re very excited to partner on the introduction of these products to the Australian market and we look forward to exploring the opportunity for Dr Pickles to enter the North American market.”
About Sierra’s products
SSH salves are fundamentally different from other products on the market, herbs are carefully sourced from organic farmers, with the product’s defining characteristic being a lipid infusion process.
Rather than using pre-made extracts, SSH infuses fresh and dried herbs in organic oils over low heat
SSH CEO and co-founder Jodi Scott said: “We believe our Green Goo products will be well received by Australian consumers because they are all-natural, plant-based and highly effective.
“Finding the right partner is critical for us entering Australia and with Dr Pickles we have met another highly successful family enterprise and identified several additional synergies that have the potential to unlock shareholder value.
“Dr Pickles has built a wonderful brand which holds tremendous appeal with consumers and has a great fun personality.
“We are very much looking forward to working with Xenon, Nigel and the whole Dr Pickles team.”