Creso Pharma has expanded into China's $39.6 billion health food market by signing a deal with a local hemp producer, and is hinting at even more opportunities to expand.
The Australian medical cannabis company on Monday said it signed a commercial partnership with China's Zhejiang Kingdom Creative, which will purchase and import its animal and human health hemp- and cannabis-derived products into the local market.
Kingdom Creative, which is primarily a hemp- and flax-based linen production company, will also build a health food, nutraceuticals, body care and cosmetic company, allowing Creso further access and scale in China.
Under the move, the two companies will collaborate on research and development as well as the distribution of hemp- and cannabis-based nutraceutical, cosmetics and body care products across China, Creso said.
The company also revealed it was in "advanced discussions" with other Asian pharmaceutical and cosmetic groups to make its products available to Asian consumers and patients.
The announcement sent Creso shares to a record high - up 17 cents, or 20.7 per cent, to 99 cents at Monday's close.
Chief executive and co-founder Dr Miri Halperin Wernli said the partnership was a great opportunity to work with a well-established organisation in the market and would give Creso a strategic foothold in China and Asia.
The medicinal cannabis company has opened four offices across China to build a sales and marketing presence and further local distribution options in China for its products.
"It will also enable Creso to rapidly expand into other Asian markets," the company said in a statement.
The Chinese health food market - which includes vitamins, dietary supplements, animal and herbal extracts and traditional Chinese medicine - is currently valued at $39.6 billion and is projected to grow by 10 per cent every year between now and 2025.
Creso said sales for medical cannabis in China are expected to grow with the country progressively opening up legislation to allow hemp-based and medical cannabis products to be available to patients.
