Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF)’s wholly-owned Canadian subsidiary Mernova Medicinal Inc. is making good progress selling into Ontario Cannabis Store’s (OCS) retail flow through program.
Initial sales via this program have generated two purchase orders totalling C$88,038 (A$99,557) for Mernova’s first two weeks in the program. The program allows cannabis retailers increased ability to stock Mernova’s products – increasing potential for Mernova’s distribution and province reach.
Mernova stocked the OCS with 150 cases of its Black Mamba product in a 3.5 gram dried flower format in each of its first two weeks in the program and received an average demand of around 100 cases per week, exceeding initial expectations and equating to ~A$50,000 of sales per week.
An additional 150 Black Mamba cases will now be provided for sale on a weekly basis to underpin additional sales growth.
In a move that will further increase sales in the program, Mernova will release its Mac 1 strain in coming weeks, which will give it an additional opportunity to potentially increase revenue in Ontario.
Creso Pharma expects the retail flow through program to increase volume of purchase orders driven by real demand from individual retail outlets.
Ontario is Canada’s largest market for recreational cannabis use and has nearly 1,500 licensed retailers highlighting a major opportunity for Mernova.
More sales, new products
The OCS’ flow through program is a recently introduced framework that allows retail outlets in Ontario to submit sales orders to the province, which then amalgamates these allocations and submits a purchase order on behalf of all retailers.
“Our participation in the OCS flow through program has provided the company with an additional revenue stream in a fast-growing province,” CPH CEO and managing director William Lay said.
“To have sold an average of 100 cases per week of Black Mamba and generate considerable sales volumes within the first two weeks of utilising the platform highlights the ongoing demand for Mernova’s leading product in Canada’s largest market for recreational cannabis use.
“We anticipate that demand will continue as we introduce our Mac-1 strain. This will provide consumers with further optionality and increase brand awareness, which the company can leverage further as new products are introduced.”