Cronos to merge, bolstering cannabis distribution

Cronos Australia has agreed to merge with fellow Australian medicinal cannabis business CDA Health to bolster its Australian and international distributional and medical clinic businesses.

The two companies announced the joining of their extensive medical clinics businesses which operate here and overseas assessing patients’ suitability for medicinal cannabis products.

The merger also brings together numerous medicinal cannabis brands, mostly sourced from third party Australian contract manufacturers, which are sold here and in North Asia, including Hong Kong and Japan.

At the same time Cronos has review an option it had on land earmarked for a cannabis cultivation and manufacturing site at Smeaton in Victoria, deciding to relinquish the option to manufacture on its own behalf at this stage.

The merger will be achieved with a mixture of Cronos shares and cash, with CDA shareholders emerging with 73.7 per cent of the merged business following the transaction.

CDA operates an Australian wholesale distribution business which distributes over 120 different SKUs of cannabis products, now selling at an annualised rate of 400,000 items.

It also operates CDA Clinics which provide a nationwide telehealth service in Australia and New Zealand.

This complements Cronos’s Cannadoc Medicinal Cannabis Clinic business located in Melbourne, Australia and Wellington.

Cronos sells its existing BATHING SHED and FCTR performance products ranges in North Asia and is planning the launch a further premium personal care brand, Saiph.

It also sells Adaya THC19 and THC30 whole-flower products and Adaya cannabis oils, which are Australian grown and processed.

The companies believe the merger will increase the size and scale of their operations and provide a route to early profitability for the merged businesses.

Picture: Cronos Australia

Subscribe to our free @AuManufacturing newsletter here.