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European Cannabis Stocks Review: Celadon Shares Spike 150% On Licence Update, OCT Continues Recovery, & Creso Pharma Censured By ASX


Celadon Pharmaceuticals 

Celadon Pharmaceuticals stock has skyrocketed by more than 150% this week following the announcement that its current Home Office licence has been successfully updated to allow the commercial sale of its high-THC product. 

It comes after news earlier this year, that the MHRA had granted it an EU GMP licence for the manufacturing of high-THC APIs. 

GW Pharma, Brains Bioceutical, Pharmaron Manufacturing, and Sterling Pharma Solutions have all received EU GMP approval from the MHRA to produce CBD-based APIs. 

However, Celadon has become the only company after GW Pharma, the world’s largest exporter of medical cannabis products, to receive EU GMP approval for high-THC APIs. It is also the second after GW Pharma to have licences to both cultivate and manufacture APIs. 

Now that the company’s licence has officially been updated by the home office, Celadon can begin to ‘pursue revenue’, and commence the commercial supply of its GMP pharmaceutical cannabis product. 

Celadon’s CEO, James Short, said: “Following our milestone GMP certification, our updated Home Office licence now gives Celadon the opportunity to pursue revenue through the sale of our medicines, and to become a partner of choice in the pharmaceutical cannabis sector.

“It has been a great start to 2023 for Celadon and we continue to work hard to get our products to market and, most importantly, to the patients that need our medicines most.”

Creso Pharma 

International cannabis company Creso Pharma, which has operations throughout Europe, Canada and the US, has been formally censured by the Australian Securities Exchange (ASX). 

The ASX said in a market announcement earlier this week that Creso was in ‘serious breach’ of ASX listing rule 10.11. 

The breach related to a A$5m share placement in which ASX says Creso issued shares to a related party, Suburban Holdings, owned by the company’s former chairman Adam Blumenthal’s father Alvin Blumenthal. 

Suburban reportedly issued A$1m of the total A$5m raised under the placement in March 2022, while the lead manager for the placement was Everblu Capital, Adam Blumenthal’s broking firm. 

According to the ASX listing, at ‘all relevant times’, Adam Blumenthal was a director of CPH and the Chairman and a major shareholder in and controller of Everblu. 

“In advance of any proposed issue of securities, it is the responsibility of the company to identify whether it will issue equity securities to a related party and, if so, to obtain any required security holder approval before the issue is made. CHP’s Letter demonstrates that CHP failed to take any appropriate steps to ensure compliance with listing rule 10.11.”

In its response to the ASX, Creso Pharma stated that the company ‘dos not consider the formal censure appropriate and has provided submissions to the ASX on this basis on several grounds including, but not limited to, the fact that Creso Pharma provided ASX with seven examples of other listed companies breaching ASX listing rule 10.11 in the last three years which did not result in a censure.’

Despite this, Creso says it accepts the censure and has rectified the error in accordance with ASX directives. 

Oxford Cannabinoid Technologies 

Since the beginning of March Oxford Cannabinoid Technologies has seen its share price jump nearly 70%, reaching its highest level since March 2022. 

This has come despite the company issuing no major updates since its half-year report in late January, 2023. 

Its continued stock price ascent is likely to be for two reasons. Firstly, suggestions that the UK Medicines and Healthcare Products Regulatory Agency (MHRA) is expected to give its verdict on OCT’s Phase 1 clinical trials for its lead compound. 

In a recent interview with BusinessCann, the company’s recently appointed CEO Clarissa Sowemimo-Coker said the company is expecting to ‘hear from the MHRA any minute, and I hope that will be proceeding’. 

“I think, particularly from a retail perspective, the excitement is building and we’ve got quite a nice group of retail investors who are very supportive.”

The second is Ms Sowemimo-Coker herself, and the company’s renewed focus on PR and investor engagement, an issue which became a sticking point for the previous administration. 

“I’ve been mostly spending my time, as you probably expect, going out and meeting with our shareholders or existing investors, and then other advisors and so on, just to build those relationships and to get that support for where we’re at and keep people updated on the business.

“And that’s been very successful. I’ve been fortunate enough to receive some very nice gestures of support and certainly from folks who perhaps previously weren’t that very happy with how things were going. So that’s been really good.”

SEED Innovations 

AIM-listed investment firm SEED Innovations announced this week that its investee company Avextra AG has successfully raised approximately €17m (roughly £15m) from ‘existing investors, the full management team, and new additional European investors via a convertible loan note.’

This latest fundraise, which reportedly includes a previously announced €7.4m from the first close of this round in October, will have seen the German medical cannabis vertical raise a total of €21.4 million since SEED’s first investment in July 2021. 

While SEED did not participate in this round of funding, its holding in the company now reportedly sits at 6.6%, representing an inferred carrying value of €5m 

According to Avextra, the fundraise will be used to expand sales and distribution across European markets ‘expedite Cannabis-based medication clinical trials, advance its R&D activities as well as further its expansion into the German market.’ 

Ed McDermott, CEO of SEED, commented: “Avextra is making remarkable headway with its operational advancements, vertically integrated production capabilities, and amplified R&D undertakings. The company is now well-financed for its future growth endeavours in the European medical-cannabis markets. The significant funding secured positions Avextra to become one of the scarce R&D and IP-driven players in the worldwide cannabis market and we look forward to following and supporting their progress.”

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