Creso Pharma’s merger with Canadian-based psychedelics company Red Light Holland (RLH) is off by mutual agreement, with Creso citing Covid-19, market conditions and shareholder feedback as reasons behind the move.

In June, the two firms announced a deal to create The HighBrid Lab, a global psychedelics and cannabinoid company, with Canopy Growth founder Bruce Linton expected to join as non-executive chairman.

However, Creso said in a statement: “Following ongoing discussions with Red Light Holland and challenges stemming from the impacts of Covid-19, both parties have mutually concluded that the merger would no longer be in the best interests of their respective shareholders.”

Creso Pharma non-executive chairman Adam Blumenthal

Creso will retain its ASX listing while pursuing a dual listing on the NASDAQ.

While the merger will not progress, Creso said it remained committed to a “strong working relationship” with RLH, with the latter placing a A$170,000 order for Creso’s hemp-based CBD products, to be white-labelled through RLH brands and distributed through its distribution company SR-Wholesale.

Creso said it expects favourable regulatory shifts in North America to boost its expansion plans for the US market, adding recent progress included record revenue growth of 451% across all subsidiaries in Q2 CY21 compared to the previous corresponding period.

Meanwhile, the company reported revenue of $3.03m in H1 2021, up 109% on the previous corresponding period, and a half-year net loss of $18.97, up from $17.4m in H1 2020.

Non-executive chairman Adam Blumenthal said: “The half year was a transformational period for Creso Pharma and the business remains in a strong position. The company has generated robust top-line growth, progressed its global expansion and introduced a number of new products, which we expect to underpin further growth.

“We will continue building on our recent achieved milestones and further validate our commitment to becoming a world leader in the psychedelic, CBD, and recreational and medicinal cannabis sector.”