Creso Pharma Ltd (ASX:CPH, OTCQB:COPHF)’s acquisition target Sierra Sage Herbs LLC has secured a non-exclusive private label manufacturing agreement with US-based FSA Store Inc. to produce the company’s inaugural plant-based first-aid collection.
FSA Store is a subsidiary of Health-E Commerce, a leading online retailer of health and wellness products that has built a family of brands with strong US market penetration.
Looking ahead, product development is underway and the company anticipates that the collection will launch in November 2022.
What’s more, on the regulatory front, US Senate Democrats are expected to introduce a federal bill to decriminalise recreational cannabis while the House of Representatives passes a cannabis advertising bill.
The passing of the potential bill would potentially provide Creso with an entry point into a market that has the potential reach of US$130 billion in sales by 2024.
“Interesting market opportunity”
Creso managing director and CEO William Lay said: “The agreement with FSA Store Inc. provides considerable validation of SSH’s product and manufacturing capabilities.
"FSA Store Inc. is part of a group of brands that is a leading provider of health and wellness products and to be trusted as the partner to provide these is a major achievement.
“Importantly, the agreement provides Creso Pharma and SSH with access to an interesting market opportunity and provides another potential revenue channel that can underpin SSH’s growth.
“We look forward to working closely with the group to provide a suite of products to their customer base later this year.
“The company will also continue to monitor the potential legislative shifts occurring in the US.
“The proposed Senate bill highlights the ongoing push for recreational cannabis legalisation across the nation and has the potential to unlock opportunities for Creso Pharma.”
Agreement summary
Under the agreement, SSH will manufacture and deliver private labelled first aid and topical therapeutic products as directed in individual purchase orders by a distributor as an agent of FSA Store Inc.
The collection is intended to be aimed at more than 70 million Americans enrolled in flexible spending accounts (FSAs) and health savings accounts (HSAs), that allow them to set aside pre-tax income to pay for qualified healthcare expenses.
The agreement provides an interesting market opportunity for Creso Pharma and SSH as well as an additional sales channel.