ASX-listed medical cannabis company Cresco Pharma (ASX:CPH) has acquired Halucenex Life Science, as part of an expansion into the global psychedelics market.
Creso Pharma (Creso) is now the first psychedelic medicines company listed on the Australian stock exchange after they announced the acquisition early this week. As part of the new deal, Creso will own 100% of the shares in Canadian company Halucenex Life Sciences.
Creso has offered to pay $10.3 million for the company, which includes $500,000 in cash, 29.25 million Creso shares and 17.55 million performance shares that will be paid if Halucenex’s Canadian Controlled Drugs and Substances Dealer’s License is approved in 12 months.
Halucenex is a Psychedelic-Assisted Psychotherapy (PAP) company that operates out of Nova Scotia – where Creso Pharma also has a production facility. They produce psychedelic medications designed for the treatment of mental illnesses, including PTSD and depression. They operate a 6,000 square foot clinic next to an emergency hospital, which includes 18 treatment rooms for PAP.
Halucenex also has a research and development license for psychedelic molecules like psilocybin. Psilocybin is a compound found in over 200 fungus species, including magic mushrooms (Psilocybe Cubensis). Since research began in the 1950s, studies into psilocybin have found that it can be used to manage the symptoms of mental illnesses like PTSD, depression and anxiety.
Moving forward, Creso will be investing at least $1 million in Halucenex, as well as a $250,000 loan for its pre-settlement operations. Halucenex will also move forward with the third phase of a clinical trial on psilocybin, LSD and MDMA in Q3 2021.
According to Adam Blumenthal, a non-executive chairman from Creso, the company is using the acquisition to expand into the global psychedelic medicine market.
The acquisition of Halucenex will strengthen our presence in Canada, as well as provide a number of opportunities in drug development which will inevitably lead to further new market entries.
The global psychedelic drug market is estimated to be worth up to $US100 billion. This is expected to increase quickly, however, as mental illnesses are expected to provide an economic burden of $US16 trillion by 2030.
Creso’s and Halucenex’s acquisition deal is expected to be finalised within the next few months.