Investors may have gotten a surprise when Creso Pharma (ASX: CPH) and Red Light Holland Corp (CNSX: TRIP) (OTCMKTS: TRUFF) announced plans to merge into one entity, creating one global psychedelics and cannabinoid company called The HighBrid Lab. The merged entity, as per the news release, is expected to have a pro-forma equity value of $347 million and with a cash balance of approximately C$45 million. Strategic advisor Bruce Linton is here today with us on The Dales Report to discuss why HighBrid is great news for investors, and what we might see in the future coming from this new merger.
Here’s some highlights from the interview.
HighBrid gets Creso off the ASX
With the merger comes the opportunity for Creso Pharma to move to the CSE and out of the ASX.
“Being on the ASX is interesting,” Linton says. “If Creso stayed on their own on the ASX, they couldn’t enter the US THC market. Which means that there’s an opportunity that they can’t exploit because of who regulates what they do as a trading entity. So when you put the two together, you have the brand, think Red light Holland, a nod to science, and a great push towards responsible enjoyment access to truly package what we said it would be.”
Being listed on the CSE means that the companies can play with US THC assets and have global opportunities related to truffles and psilocybin, and the science coming out of Switzerland, he adds.
The HighBrid Labs will be a place where science, fun, and the grey zone of business “come together” says Linton
HighBrid could mean that we’re the best of both breeds, says Linton, but the way it is sold and positioned could also mean we want you to have a fun high. “So, you’ll own stock in HighBrid, but you’ll buy products sometimes called Red Light. It’s a spot where science fun and that grey zone of business all come together.”
In the consolidation, Linton says, Creso will stand for the science, and Red light will stand for the result of the science being consumed as a human. He believes both have a storyboard, and the merger allows sophistication of science with enjoyment of consumption.
Linton feels that investors in HighBrid will be excited by these benefits
One of the things investors should be happy about: Linton says that HighBrid helps Creso shareholders get access to is a more aggressive market opportunity. “We can do everything we could before, but we can do more now because of that exchange item,” he says. “It lands in the right exchange to move against any option.”
But investors should also be happy because this merger consolidates the base cost of being a listed entity. That means the company can also bring more skilled talent to bear, and the merged entity will also have a strong cash position.