Melodiol Global Health Limited (TRIP.CN) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to today's webinar. My name is Alex Paull from Investor Stream, and I'll be your host today. Now as you're all aware, earlier this week, Creso Pharma and Red Light Holland entered into a definitive agreement to merge their businesses and create The HighBrid Lab. Today, you'll be hearing from psychedelics entrepreneur Bruce Linton, current Red Light Holland CEO Todd Shapiro and Creso Pharma Non-Executive Chairman Adam Blumenthal. Newly appointed HighBrid Labs Executive Vice President William Lay will also present the merged entity's slide presentation with input obviously from Todd and Adam. And you can also download a copy of the presentation by navigating to the handouts pane in the control panel. I understand the presentation has also been launched on the ASX, so you can download it from that platform as well. A copy of the webinar will be available on both Creso Pharma and Red Light Holland's website and social media platforms later today. But for now, I'd like to welcome Bruce Linton to the webinar, and Bruce is going to kick things off for us. So Bruce, the floor is yours.

Great. Thank you. Good morning, everyone. I -- as you may be aware, I've been an active adviser with both these firms for some time. In fact, Adam [ and Mera ] and the people at Creso, I've known them as a company for several years. And Todd is an expert, great entrepreneur, excellent person for many years. And so I feel really proud that you can actually bring really capable, creative people together, and then they determine that they would fit well together and could actually accelerate each other's mission. And I give you that in that we're going to give you a fairly detailed overview of this transaction. And I hope, at the end of it, you really wonder, wow, what next? Because this is an organization that has unbelievable optionality. And what I mean by that is being listed on the Canadian Securities Exchange means that we can look to the U.S. for THC. Having capability in research in the lab for psychedelics in Canada means we can play a deeper game on applied science. Having the brand activities and position that Todd and the crew have done under Red Light Holland means we have active markets. We introduce the products that Creso has and I think we can see serious acceleration. And so I think this transaction really increases optionality for management. I think it really increases the potential of acceleration for the investors. And it puts the company in a really interesting spot. There are a great number of jurisdictions that are changing how they perceive what I think of as and refer to as sort of maligned or mismanaged molecules. And the world is changing enough that I think increasingly geographies are ready to look at what do adults want, what do they need, how do they move to being their best self. And I think we're one of the best, if not the best-positioned company, to take hold of that, achieve early revenues and be a strong and stable company who can purchase many others. So I really do hope you enjoy what you hear and that you expect at the end of it to perceive this company as one that's on a position of momentum, opportunity for things which are next. And the team is very strong. The last person introduced is a gentleman named Will Lay. Will worked as a right hand to me in Canopy, which is a large cannabis company, which did 31 acquisitions, 16 financings in 6 years. And some of the acquisitions were substantial, more than USD 3 billion as a single one, which Will was the lead for me on. And so I think you're bringing horsepower that's got energy and is ready to go. So over to you guys. Todd, take it away.

Thank you very much, Bruce. What a pleasure to have you aboard here, and thank you, everyone, for listening and joining. Listen, this is a really exciting time for both Red Light Holland and Creso Pharma. You might not know who I am. Obviously, you're down there in Australia and we're up here in Canada. And I'd love to take this moment just to sort of talk about myself for about 30 seconds before we talk about this very interesting merger and this very exciting opportunity for everybody. Long story short, I've done media for a very long time here in Canada and a little bit in the United States as well. I've been a brand builder of very big companies, including Canopy Growth, where I acted as an ambassador with them and worked very closely with Bruce and the team and had a lot of fun doing so, including bringing up Snoop Dogg for one of their concerts. And of course, we all saw great results over at Canopy Growth. I worked with companies like Canada Goose, Samsung, Canadian Tire, which is a massive chain, think Home Depot, over here in -- obviously, on the Canadian side. And throughout all my days of really interviewing a lot of people, a lot of sort of high-net-worth people and big-time celebrities, things like this, one of the common themes over the last couple of years that kept coming up sadly was mental health issues and a lot of depression, a lot of anxiety and just really a lot of fear about life in general. And I took it to heart, and I took all of that to heart for a reason because I suffered from anxiety myself. And I thought, well, hang on a second, maybe this is an opportunity to explore a little bit further and a little bit deeper. And that's where my new love of exploring and learning about psilocybin came from, psilocybin, of course, being the psychoactive ingredient in magic mushrooms or, as Red Light Holland deals with, magic truffles. And by the way, just for those who maybe are wondering what the difference between a magic truffle and a magic mushroom is, really not much. If you're to ask a mycologist, they might get into a much more detailed explanation. However, the main difference is -- to really understand here is one is grown in an underground environment, the truffle; and one is the aboveground, magic mushroom. And through my exploration and through my deep dive and through my due diligence on the space, I realized, my goodness, anecdotally, story after story, posts on social media, interview after interview kept leading back to anecdotal sort of statements here about how psilocybin and microdosing magic mushrooms was completely beneficial to individuals' health and well-being. Now as a company, we can't make medical claims. And of course, this is why we're so excited about potential mergers here and the idea of working with Halucenex and, on the other side, Mera Life Sciences, which we'll dive into later to explore this further. But in the interim, there are natural occurring products with areas in the world in legal frameworks that you can get into this space. And that was something I immediately decided to do. I went out, and I raised $4 million. I took Red Light Holland public in May of 2020, May 28. So we're trading just over a year now. The original raise was at $0.06. I think we've increased shareholder value by over 500%, 600% now. And we're very excited about everything we've accomplished in just over a year at Red Light Holland. And of course, we're totally stoked and excited for this potential merger now with Creso Pharma and a company that you know very well to create The HighBrid Lab. The HighBrid Lab, of course, stands for exactly what I think everybody thinks it does based on the name alone: a hybrid, a hybrid approach. How is it that, all of a sudden, we can go into a great sector of cannabis, which deals with THC and CBD, into another growth sector and an amazing sector, in my opinion, of psilocybin and psychedelics coupled with the fact that there are recreational products and now, of course, there is the science, the R&D and the applied side to it all? The hybrid approach. So when -- as Bruce alluded to earlier, he connected individuals like Adam to me and Will, and we just started having these conversations. And I must admit, in these types of situations, they don't always go so friendly. We felt like there was just an immediate friendly connection, a great perfect connection, a perfect marriage, so to speak, of what's going on over at Creso and, of course, what's going on over at Red Light Holland. And we decided, you know what, this is something we need to take seriously immediately because, a, the optionality, which Bruce spoke of, it gives us great opportunity if we were to come together to look at all the hybrid approach in all the different sectors and all the different categories. If you were to think of a Coca-Cola, for example, they're not just sticking with a pop brand. They get into orange juices, and they get into waters, and they get into energy drinks. That fits under their umbrella. And we felt that if we could get into a product line that fits under our umbrella, while also trying to figure out one day how we can focus on applied science, we have a perfect formula. And that's exactly what we want to present to you today, the perfect formula of Creso Pharma meeting Red Light Holland, which will equal The HighBrid Lab. I really appreciate all of your attention for the next 30 minutes, probably. And really, at the end of it too, I try to make myself as accessible and as transparent as possible. And so if anyone ever has any questions, if they want to e-mail me, please feel free to do so at [email protected]. I can remind you of that a little later. But I really try to make myself as a very active CEO to every shareholder no matter how big or small because I'm super grateful for the support. I'm going to pass it over to someone you know and someone who is your chair. Please welcome Adam Blumenthal of Creso Pharma.

Right. Thanks for the introduction, Todd. And thank you for the overview of your background and of Red Light Holland. It's something that we're really excited about. And thanks again to Bruce as well for your introduction. And I think we all know your track record and history, Bruce, and we're very honored for you to be involved with The HighBrid Lab moving forward. I'm just very briefly going to remind everyone about Creso. And later on in the slide, we'll go into a bit more detail about where we are at and to talk about the exciting synergies. Essentially, Creso has 3 areas of focus: we have Creso Switzerland, Creso Canada and our proposed acquisition, Halucenex. Creso Switzerland is split up into a few different facets. We've got -- we're focusing on human and animal health. Under the human health, we've got Creso Topical, Creso Therapeutics and Creso Nutraceuticals, and these are products that have been under product R&D and development over the last 5 years, and we started selling these over the last 12 months. We've seen a great takeup. And in our quarterly reporting, the market has seen that revenue has started to build up meaningfully, and we intend to continue to do so. In Creso Switzerland, we also have our Creso animal division. A lot of people don't realize how lucrative and how exciting the animal space is and with how much money is actually spent every year in the animal space. Additionally, with that, COVID has extremely accelerated pet ownership to over 10x more than what it was previously. So the type of -- and the kinds of disposable income is now being spent in the animal space is huge. This is a market that we've been in prior to COVID, and we're one of the first movers in the CBD space for animals. And we intend to continue to take advantage of our first-mover advantage there. Creso Canada, which everyone again is familiar with, we have Mernova, which you have state-of-the-art 24,000-square-foot facility. We own the land that Mernova is on. We own the surrounding land. We're able to scale this up to 200,000 square feet when we want to. Our intention was to scale up and expand. This acquisition comes at a great time for us expanding to potentially America and other global jurisdictions. And we'll be able to expand in due course. In Mernova, we have some pretty well-respected and regarded brands of cannabis, which we sell, and THC products. We were recently awarded something which is called craft cannabis. This is a very, very exclusive achievement. It's kind of a -- it puts our product above other certain products. In order to be chosen to get Craft Designation, we need to be able to qualify as a candidate that our products are hand trimmed, hand dried, hand packaged and growing in a facility that meets certain standards and produces a certain amount of kilograms per year. So this is something that's really exclusive, and we're very, very proud about that. And our customers have shown us this exclusivity. And lastly, we have Creso Halucenex, which is our proposed acquisition to acquire a Canadian R&D, clinical and psychedelic trial and treatment company based in Halifax, Canada. So these are our 3 facets. Obviously, with the Halucenex transaction, which is pending, that's the immediate synergy, which we saw with Red Light Holland, but we'll talk and I'll talk a little bit later about the benefits for Creso in doing this transaction. So that's a very brief overview. And thank you. And I'll hand over to Will and Todd.

Yes. Will, I'll jump in real quick before we hand it over to you. Will Lay, of course, is coming on as the Executive Vice President and Chief Strategy Officer. What you're seeing on the right there is everything that we're doing at Red Light Holland. And this may be new to all of you, and this is why I'd love to take just a moment to explain what we've done in such a short time and how proud we are as a team to be so efficient to create momentum and to continually deliver on what we say we're going to do. We're not just a company on this side of the border or this side of the ocean that talks about concepts on a deck and doesn't follow through with them. We're very motivated. And to steal a line from, I guess, Steve Jobs, who spoke at Stanford University [ in so ] many years ago, he talked about staying hungry and staying foolish. We're a very hungry company, and we like to have fun. And we like to have fun because, let's be honest, the brand, you should have fun. And that's why we developed Red Light Holland. And Red Light Holland, by the way, if you think about what the Red Light District stood for, it actually talked about protecting legal sex work and regulating and legalizing that industry. And if you think about the sector that we're in, which is psychedelics, this is exactly our mantra: We want to protect our end users. We want to provide education for them. We are doing it in very responsible ways with great information through virtual reality, augmented reality, careful packaging and careful descriptions within those packages that are all, of course, legally approved. And we are also doing it through regulation. And the regulation is something that we're very proud of because, as different markets start to open up, we're seeing Measure 109 being written in Oregon in the United States. We're seeing bill -- Senate Bill 519 happening in California talking about the decriminalization of all psychedelics. And we're seeing sort of this trend and very similar to what cannabis did here in Canada, where I'm talking to you right now from, where cannabis became sort of first medically prescribed and then, of course, went into a very legal framework on this side that perhaps that's what we'll start to see across the world. So we're doing it very carefully with an iMicrodose app. The iMicrodose is our product of magic truffles that you can buy in what's called Smartshop. Think of either a convenience store or a grocery store or a dispensary. They're just sold next to very popular restaurants or a Baskin-Robbins ice cream shop. It's not something that's hidden or seedy. It's right out in the open in the Netherlands, and that's where our iMicrodose products are housed. And as well, we recently bought a company called SR Wholesale, which is a massive distribution network in the Netherlands and across Europe. They actually have exposure to over 1,000 different types of smart shops, seed shops, you name it, cannabis shops. And essentially, that's another one of these great immediate synergies we started to realize, that, hey, while we're dealing with psychedelics and SR Wholesale is so great at distributing through a wholesale network all sort of magic truffles and different brands at magic truffles including our own, they're also, well, guess what, dealing with a lot of different CBD products. And who has CBD products and who has some of the best CBD products in the entire planet? Well, Creso Pharma does. So SR Wholesale is a very active and established company in the Netherlands and in Europe and significantly in revenues, and we're very proud of these early synergies. We acquired a wholly owned subsidiary now of SR Wholesale only a few months ago, but we're already seeing great benefits for the company. Radix Motion, you'll see that logo there. That is a tech company. We believe that tech and data is one of the most important things that we can have in this sector. And the reason being is that the more consensual data that we collect, the more we can potentially work with governments and regulatory authorities to say, hey, in the Netherlands, we're dealing with psychedelics in this legal framework. As you start to open up your market, you're going to want to learn more about this stuff, not synthetic clinical trial companies that will be doing it for maybe 8 to 10 years. You'll want to learn something now with natural occurring products, natural occurring psychedelics, whether they're magic truffles or magic mushrooms. So we can be able to collect data and provide that data. And I think for those of you listening, one of the things that we're very proud of is we're -- listen, we're -- at the end of the day, we're a very empathetic company, and we care. We care about our end consumers, and we've set up tele-counseling support. We have an iMicrodose app, again, to collect that data. And these are the types of initiatives that we've done in under a year that people are trying to catch up and trying to figure out how our tech is so great. And that's thanks in part to us acquiring Radix Motion and working with a wonderful brilliant neuroscientist named Sarah Hashkes. As well, we have a pending acquisition of Mera Life Sciences. It's not too dissimilar from Halucenex except for the fact that we're actually going to be able to work with all different types of psychedelics, anything from ayahuasca to peyote to MDMA to a psilocybin. And we wanted to work with natural occurring products to do applied science and drug discovery. And that's in St. Vincent and the Grenadines. We are having these productive talks for months now. Part of it is learning about the legislation being written through St. Vincent. Again, it's a sensitive area. And we're just being very patient with the government and with Mera there, but we're excited to update the public on that as we get information. Happy Caps, you'll a logo there. That's a mushroom farm. Not a magic mushroom farm, it's a mushroom farm in revenues now that sells home grow kits. I'm a brander. I told you that at the beginning of this conference, and I'm always going to continue to think that a brand is always extraordinarily valuable or maybe even more valuable than a commoditized plant or commoditized fungi. If we keep building brands and keep seeing revenue generation, we feel that this is a great opportunity for all shareholders. So you can order these home grow kits. And the also interesting thing about home grow kits, much like Canada, when they regulated and legalized cannabis, they allowed every adult to have up to 4 cannabis plants. So it wasn't only commercial. And maybe one day, if they open up the laws for psilocybin and allow people to have magic mushrooms or perhaps will say you don't just have to buy it from a dispensary or you don't just have to get it prescribed, perhaps you can grow your own at home. And that's one of the things we're trying to be visionaries of. Wisdom Truffle is almost difficult to get into now, but it's a branding exercise of a companion figure. For anybody that understands what KAWS is, k-A-W-S, go and check that out after and look at what companion figures and aid meditation devices can really bring, health and happiness, to individuals. And merchandise, I'll never not be a merchandise individual. Merchandise is hugely popular for companies not only for their bottom line, huge margins in clothes and great revenues for you, but great billboards, walking billboards of shareholders and supporters of your products are one of the most important things. Ferrari sells more merchandise in key chains than they do Ferraris. So it's an interesting sort of angle to look at on how companies really create great revenue growth and great opportunities for their shareholders. Will, I'm going to pass it to you now. Thank you all for listening to that.

Yes. Thank you, Todd, for that great introduction. And likewise, I'm delighted to be here presenting to Creso Pharma shareholders in Australia. Before we get into the meat of the presentation, I'm going to give you a high-level overview of what we believe are the 6 key value drivers or value proposition themes for this business. I'm going to move through this fairly quick to the top left to the bottom right as we'll discuss each of these in detail further in the presentation. But starting from the top left, we believe that, as a combined company, we've curated a portfolio of brands and assets and capabilities that are balanced and in high-growth markets. And what this means is that we can structure our businesses to take advantage of the fact that some of our businesses will generate cash flow today and use that cash flow to partially pay for long-term upside opportunities and optionality in things like market expansion for recreational psilocybin or applied sciences for psychedelics. As a combined company, we're very well capitalized. We'll have approximately AUD 48 million of cash on the balance sheet, and we believe our management teams and product offerings are highly complementary, which we'll discuss further in the presentation. Creso as part of this transaction has a real opportunity to immediately scale its recreational THC offering. So being listed on the Canadian Securities Exchange not only allows regulatory access to the United States, where we will look to make transactions or acquisitions in the near future, but Canada is also a large and growing cannabis market, and we think there's an opportunity to expand Creso's market share within Canada as well. CBD is another near-term opportunity, and we'll look to enhance distribution of Creso CBD products throughout Europe and also bring those products to the United States over time. As Todd alluded to, since being founded Red Light Holland's core objective is to build a globally recognized psychedelics brand, and this objective will not change within the combined company. And we'll continue to take a responsible consumption, education, technology and tele-counseling approach to that. As Adam and Todd have mentioned as well, between Mera Life Sciences and Halucenex, the combined company will have the flexibility to conduct a large array of applied science research. And I want to highlight here that we are looking to be careful allocators of capital, disciplined allocators of capital. And as such, we're going to prioritize projects within this sphere that have relatively shorter capital expenditures and relatively shorter payback periods. Next slide, Alex. And so before I go into each of those themes in further detail, I'd like to briefly describe the transaction terms to you. And I know it's a little bit of a complicated transaction when you start talking about things like a reverse merger, so I'm going to try to describe it in simple terms. But structurally, this transaction is being effected by way of a court-approved statutory scheme of arrangement under the Australia Corporations Act. It's a very standard transaction structure in Australia, and we have similar structures within Canada. I think from a Creso investor perspective, the way you want to look at this is, in a perfect world where both exchanges have the regulatory flexibility to do all the things the combined businesses want to do, there will be no reverse acquisition. Creso Pharma would make an offer to Red Light Holland shareholders. We combine the businesses, and we'd move forward trading on the Australian Stock Exchange. Unfortunately, that's not the case. We're not in a perfect world. And the combined company will significantly benefit from sitting on the Canadian Securities Exchange. And so what we've done by reverse acquisition is essentially reengineer the transaction I just described to you, where we end up on the ASX, and done the exact same economics to end up on Canadian Securities Exchange. And so it becomes a reverse acquisition. Creso Pharma shareholders are going to receive 0.395 shares of Red Light Holland for each Creso Pharma share they own today. Nothing will change to existing Red Light securities, obviously. And on a combined basis, Creso Pharma will own 57% of the combined company. The combined company is expected to have a split Board of Directors with 3 nominees from Creso and 3 nominees from Red Light Holland, and Bruce Linton is expected to join as Non-Executive Chairman. Todd, who you've heard from already, will remain the CEO of the combined company, and we'll discuss other management roles in subsequent slides in this presentation. We've talked about this already, but the combined company will be renamed The HighBrid Lab. This is not to say we are going to lose Red Light Holland and its existing brands or Creso Pharma and its existing brands. We love the products and the brands that both companies have put together, and we think The HighBrid Lab is a perfect synergy to house all of those brands under one umbrella. We expect that Red Light Holland's listings, so on the Canadian Securities Exchange, OTC, for example, will remain in place. And in due course, Creso will update Australian investors on the way that they're able to trade on those exchanges. And of course, transactions like this are always subject to customary closing conditions. Next slide, Alex. So the first thing I want to get into is this concept of a balanced portfolio of high-growth market pursuits. And as I described earlier, this really involves organizing our business into 4 key categories, in order from short-term cash flow to long-term cash flow with that goal of being able to offset some of the R&D and investments that we're going to have to make in the applied science division and perhaps in recreational psychedelics with the cash flow that we're generating currently in our other business units. You'll also note on this slide that we are targeting multibillion-dollar, high-growth markets around the world. So recreational THC, as I've alluded to already, there's a real opportunity to expand sales within Canada under Creso's Mernova brand. And as a combined company on the CSE, we'll have the capabilities and the ability to enter the U.S. THC markets by acquisitions. We believe this is a really compelling market and a really strong catalyst for value accretion for all shareholders. CBD markets, we will look to enhance distribution of Creso's CBD product portfolio through SR Wholesale. We're going to develop a strategy to enter the U.S. market for Creso's world-class CBD products, and we're really excited about opportunities to collaborate on new products together as a combined company. In terms of profitability, Red Light Holland's operation in the Netherlands through sales of iMicrodose kits and through SR Wholesale operations is actually profitable today. And we expect that over time as new markets open to adopt an early-mover strategy so that we can be on the ground first in each new market that opens up. On the applied science side, the combined company will take advantage of Creso Pharma's 100-plus years of Swiss pharmaceutical expertise in Europe. And this will be a great opportunity to explore practical applications for psychedelics, which, again, is going to be a large market in North America and potentially around the world one day. Next slide, Alex. So on this slide, I'd really like to give you a quick overview of the combined company's global operations. So as you can see here, the combined company will have a AUD 48 million in cash balance and a pro forma market cap of CAD 347 million based on the closing price prior to the transaction. I think this is really important because this -- the bolstered cash balance, the potentially increased liquidity in the stock, both of these are going to allow us to make investments to scale the business around the world as we deem appropriate. And I wanted to show you here that whether it's from magic truffle sales in the Netherlands, Mernova cannabis sales in Canada or even pilot named patient basis CBD and psilocybin sales in Brazil, we're really laying the groundwork for meeting those future objectives that we've set ourselves for this business. Next slide. I'll quickly take a moment to introduce you to our management team or the expected management team of the pro forma company. So as mentioned, Todd Shapiro, Red Light's current CEO, will remain on as CEO of the combined entity. Todd has tons of experience working in marketing and branding and, over the last year, has built Red Light Holland into one of the most recognizable names in recreational psychedelics today. Hans Derix is our President. So Hans sits in the Netherlands and has been instrumental in building out Red Light Holland's custom truffle farm in the Netherlands and also going through a current $1 million grow and harvest of magic truffles -- sorry, 1 million grams. Sarah Hashkes is our Chief Technology and Innovation Officer. Sarah came into Red Light Holland through the acquisition of Radix Motion. She has a background in cognitive neuroscience and immersive technology, and we feel that she is perfect to lead the charge on the technology front for the combined company. I'll quickly introduce myself. So as Bruce mentioned, I spent a lot of time working with Bruce at Canopy Growth on a number of different transactions. I've actually, in the last 3 years, completed 3 -- $5 billion of cannabis M&A transactions. And my role within the combined company will be to develop, alongside the rest of senior management, the go-forward strategy and plans for the business and identify and execute accretive acquisitions for the combined company. There's 3 key roles on this slide that we will need to fill between now and closing. Those are CFO, Chief Operating Officer and a VP of Sales and Marketing. And we're looking for world-class individuals to round out the bench strength of this team. That search is underway, and we'll update the market in due course. But with that team altogether, we feel that we'll have the right capabilities to take on all the markets that we've explained to you in an appropriate manner. I'd also like to mention that, around the world, the senior management team will be supported by a group of very talented individuals, whether it's Creso's Swiss team, which has 100 years of pharmaceutical experience, Mernova's expert cannabis growers in Canada, marketing and branding professionals within Red Light Holland. The senior management team would not be able to move forward without the support of all of these talented individuals, and we want to recognize them as really important to our organization. Next slide. Here, I'll briefly introduce the combined company's Board of Directors. So you heard from Bruce Linton earlier in this call. He's expected to join the combined company as Non-Executive Chairman. Bruce has an unparalleled experience in growing both cannabis and psychedelics companies and his -- he will add a lot of value to the combined company's Board of Directors. In terms of the other members of the Board, there will be 3 from Red Light Holland and 3 from Creso Pharma. And I feel like when you look at this Board of Directors as a combined entity, you'll see a lot of different experiences from a lot of different industries and a lot of different markets. And when you bring that all together, we think that really supplements the strength of the senior management team. And I'll mention as well that both the Board and the senior management team will have the opportunity to tap into the strong advisory group network that both companies have built over the last few years. Next slide. So now we're going to get into our 4 distinct product categories or business units. Adam, if you'd like to speak a few words on this slide, please jump in, or I'm happy to go through them as well.

Yes, great. Thanks, Will, for that fantastic overview of the 2 companies as they stand and what the merged entity is going to look like. As briefly mentioned earlier, our recreational THC is based out of Mernova in Canada, and we have our products which are currently being sold. To touch on recreational THC, and I'll also touch on other products and CBD and just talk about the key benefits of the merger for Creso and the company's shareholders. The combination of Creso and Red Light Holland will accelerate both companies' growth strategies, including our current THC sales. For Creso Pharma, the company is able to leverage from Red Light's existing CSE listing to almost immediately enter the U.S. market. Now I know that Bruce has touched on this a few times as has Todd and Will, but entering the U.S. market is a huge step for us. Being on the CSE allows us to do that almost immediately. That's highly lucrative. It's something that we've been looking to do, and it's a market we've been looking to enter for some time. And one of the main benefits of this transaction is we're able to do so almost immediately. On touching the U.S. market. We also are looking for revenue-generating acquisitions. There are many, many, many of them out there, as you know. Leveraging off of Will's experience as well as everyone else in both in the transaction. These acquisitions will assist the U.S.A. market entry and will assist us in our aim to increase our revenue growth, which is our -- one of our lead priorities. The combined company has been able to attract industry leaders such as Bruce and Will. And we all know their track records, and we've touched on them previously. Both of their established experience and networks in the North American cannabis industry is going to be pivotal for us scaling Mernova's operations and obtaining licensing sales agreements. I...

Adam, before you move on to the CBD slide, I just really want to emphasize the opportunity set that we're looking at here. So the U.S. cannabis market has been in the news, and rightly so, over the last several months and years. It's the most attractive cannabis market in the world from a growth and an investment perspective. But I'd first like to mention that Canada is not a small market for cannabis. It's growing rapidly, and it will be $9 billion by 2026. By increasing market share in Canada alone, there's a great opportunity for Creso and the combined company to all move forward with increased sales. I'll quickly touch on this point about the U.S. market because I truly believe this is one of the most compelling investment opportunities available to all companies in all markets, let alone just cannabis companies. But if you think about the fact that the United States cannabis market is going to double in size by 2025 to USD 41 billion and the fact that, today, there exists structural limitations in the setup by the fact that cannabis remains federally illegal. This has resulted to U.S. cannabis companies having valuations that are significantly depressed against Canadian peers despite a larger total addressable market. And as Adam mentioned, between myself, Bruce and some of the other members of the team, we have extensive experience working in, looking at acquisition opportunities in these markets, and this will be a really key growth lever for the combined company.

Thanks for that, Will. Just touching on -- next slide, please, Alex. Thank you. Just touching on Creso's CBD products. So this is, again, touching on Creso Switzerland. Just to remind everyone on the basis on how Creso Switzerland is formed and is operated, our team in Switzerland has come from some of the largest pharmaceutical names in the world. They have administered over hundreds of millions of dollars worth of clinical trials and have brought to market many, many household medication names that we all know and use every day. And it's just from this experience and this track record that we've been able to administer, over the last 5 years, our R&D into our products. For the last 5 years, we've been a pharmaceutical R&D and development company. In the last 12 months, we've been able to turn the corner, and we've converted and evolved now into not only an R&D and development company but also sales and distribution, and we've been successfully selling these products. The merger is going to allow us to immediately sell these products into Red Light Holland's existing distribution and e-commerce platforms. We've touched on that previously in the slide. That, again, we see, is the low-hanging fruit and some of the immediate synergies that we're able to leverage off, and that will be able to benefit The HighBrid Lab essentially from day 1. Will, I'll hand back to you.

Yes. Adam, you touched on a number of the key points there. And I would just add that the combined company is really excited about combining the scientific expertise and the marketing and branding background that sits at Red Light Holland to not only increase sales of these products in Europe and hopefully enter the U.S. market but also to collaborate on new product development together in areas such as functional mushrooms or maybe even CBD functional mushroom blends, which are gaining popularity daily, and they're part of the industry that we can't overlook. Next slide, Alex. So I think Todd did a really great job explaining this earlier in the presentation, but I'll reiterate that, since inception, Red Light Holland's core objective has been to create a global leading recreational psychedelic brand. And as part of The HighBrid Lab, the rigorous pursuit of this objective will not change nor will Red Light's approach by using and encouraging responsible consumption through enabling consumers to access education, technology and tele-counseling. In the last several months, we've seen small but meaningful shifts in regulatory frameworks around the world that signaled the potential future for this industry. I'll highlight that it remains potential, but even things such as the introduction of Measure 109 in Oregon, this is a signal of positive change potentially to come. Red Light Holland reacted very quickly to that news in Oregon, formed a JV to participate in that market if and when appropriate. And we really want to maintain that approach of being early movers, getting into markets first with a recognizable brand name. That's the same proactive approach we want to bring to the combined company. And most importantly for Red Light Holland, the objective remains the same. We want to build the most important or -- most importantly, we would like to build the most recognizable recreational psilocybin brand in the world. Next slide.

I'll just quickly add, Will, if you don't mind me jumping in here, to the recreational psychedelics slide. If we wouldn't mind going back for one second, Alex, because there's a picture there. You can see our farm, our truffle farm. It's about a 3,000-square-foot farm but with room to grow as well in Horst, the Netherlands, where there's actually a lot of farmers and truffle farmers, magic truffle farmers. And if you think about the overall combined strategies of the company, too, really, we're farmers at the end of the day, and I think this is a point that shouldn't get -- go unnoticed. We farm magic truffles through our Red Light Holland truffle farm in the Netherlands. We also have a gourmet mushroom farm in Nova Scotia, and that does home grow kits as well for branding exercises and product growth and revenue generation, clearly. Also, if you think about the cannabis operation in Mernova, technically, that's a cannabis farm. So look at all these different farms that we have, imagine expanding as markets expand with the know-how and the IP as farmers that we could potentially spread one day to different markets. Maybe, for instance, psilocybin might open up in Brazil who we technically deal with. Well, we have the know-how how to grow magic truffles and magic mushrooms. Maybe we could grow cannabis in extra places and extra markets as well. And I love the idea that we're farmers, too. There's great margins in farming, especially on the mushroom side. And if you think about what we do in terms of vertical integration, we farm meaning we grow. We then harvest. We then package. And we then distribute. And then we basically control the bottom line. And that's what I love about both companies because we're focused on doing that. And I appreciate you, Will, for allowing me just to stress the importance of that.

Absolutely, Todd. And so I'll go through this slide, and then I'll pass back to Todd and Adam to conclude the presentation. But as a combined company, The HighBrid Lab also recognizes the importance of -- that applied science plays within the psychedelics space. This is both from a commercial perspective as the market is expected to grow to USD 6.8 billion by 2027. But also from the perspective of we want to have as much information as possible about the compounds that we may give to our consumers so that we can encourage that responsible use that we talked about on the previous slide. And so given the pending acquisitions of Mera Life Sciences and Halucenex, as a combined company, we'll have significant flexibility to do scientific research on a number of different psychedelic compounds. And here highlights another key synergy of the transaction: Creso Pharma has a Swiss team with 100 years of pharmaceutical experience, and their experience will be invaluable to the combined company's applied science division. I'd like to highlight one more time on this slide that we're going to be very careful allocators of capital, disciplined allocators of capital in the sense that, as we go through potential projects to look at in the applied science space, we will prioritize those projects that have low-capital expenditures and fast payback periods and look for ROI opportunities within that frame. Finally, we'll consider introducing retreat-style opportunities for psychedelics in markets that allow it in the near future. Todd, Adam?

Thanks for that, Will. So this brings the presentation almost to an end. I'll just add my closing remarks and address a few of the frequently and most common asked questions. So just to summarize, the combined entities, we believe, are extremely synergistic when the 2 companies got together and we were looking at how the transaction would unfold. A lot of the time, we were using the motto 1 plus 1 equals 5. And that's what we believe, and that's what we see. As we begin and continue to explain and demonstrate these synergies and this merger, we believe the value will start to unlock. This is the first of many webinars and interviews that we've done in Australia, and we plan to have many more over the next 30 days. We're here to continue to talk to all shareholders and stakeholders if they have any more questions as this process continues. And we hope in the short term, we expect that the valuations will start to show that. And the rationale and reasoning for this transaction that we have put together, we believe that investors will begin seeing that. Now just to address a few key points. Creso shareholders will receive 0.395 Red Light Holland shares for every 1 share they have. So if, a, you're a Creso shareholder and you have 1 million Creso shares, you have to times that by 0.395, and you will end up with 395,000 Red Light Holland shares, which will then be The HighBrid Lab shares. Obviously, less or more shares apply that same ratio. A lot of other questions that have come through are with regards to when will we stop trading and what is the process. So just to be clear, we've anticipated that Creso will cease trading on the ASX approximately in the 1st of October. We don't see that occurring prior to that. There's many steps that the company needs to take to get there. We've engaged an independent expert to provide us with their view and opinion on the transaction. We have to as well have a shareholders meeting in due course, then that goes up to a vote. And then there's a 30-day trading period after that before we get removed from the ASX. So we believe this won't happen before 1st of October and probably sometime in October. So generally, just what happens when shares stop trading in October, shares will generally stop trading on the Friday. The Australian registry will communicate this with the Australian registry. Over the weekend, they speak to each other, and your Creso shares will then be converted into the HighBrid Lab shares as per the exchange ratio. And on the Monday morning, you will have HighBrid Lab shares in Canada. Lastly, there's also a few questions in terms of how do you trade these shares overseas. Well, I think that, over the last 12 or so months, we've seen a huge surge in investors all over the world having much greater access to different exchanges and being able to trade on different exchanges. So that process has become a lot easier. And most Creso investors and shareholders, we believe, are currently trading in many markets anyway. However, if any shareholders do have queries with regards to how to access or trade on the CSE, our company has got a list of trading and institutional brokers that can assist them within their process. And I think that leaves everything off from my side. So we just wanted to thank everyone for dialing in and listening today from all the 4 corners of the globe. And please continue to reach out to either of the companies with all your queries. We'll be having many more of these webinars as the journey continues, and we look forward to updating you with positive progress.

Thanks, Adam...

If I could quickly...

Todd, did you have something to say?

I meant to have said, if I could quickly jump in here -- yes. If you wouldn't mind. Sorry, Alex. It's Todd Shapiro. And Adam, thank you so much, and a great explanation, of course, for your wonderful shareholders. I just wanted to end it on one note: it's my excitement and passion. I can't hide my passion in life, and I'm not that type of person to ever do so. As I said earlier, we're a very hungry and motivated company, and I'm a very sort of hungry and motivated CEO with an incredible team around me. I love being coached, and I love being able to coach. And I just think that these synergies, as you can tell, are really truly just so optimistic in terms of what we feel like we can do in such great growth markets. I don't sit on the fence much in life. Like, I might not be sure which one of my 2 beautiful children I love more, my 5-year-old boy, Sawyer, or my 2-year-old daughter, Scarlet; or who's tougher, someone who plays hockey or play footy. But I can tell you with concrete authenticity and confidence that this idea of a merger between Creso Pharma and Red Light Holland is one that we are so, so, so optimistic and confident about in terms of increasing shareholder value and really trying to dominate all those different types of markets that we spoke of, and we're very excited about the potential for The HighBrid Lab. I really, really appreciate all of your time. And I look forward to getting to know more of you personally as we move forward in the future.

Thanks very much, everyone. Look, that's all the time we have today. I'd like to thank you all for joining me. And I would also like to thank Bruce, Todd, Will and Adam for taking the time to present for us today. As I mentioned before, a recording of the webinar will be on both Creso Pharma and Red Light Holland's website and social media platforms later today. As you'll be able to see, the contact details for Creso Pharma are on the screen at the moment, and they're also in the presentation that you can download. So any questions, concerns, feel free to please use those contact details and get in touch. I just want to say thanks, obviously, for -- I understand that it's been very difficult to have Todd, Will, Adam, essentially, Bruce, 4 corners of the globe on this call as well as all the shareholders on the call as well. So I really appreciate you all taking the time to join us today. Thank you, everyone, for your attendance, and I hope you enjoyed the webinar. Thanks very much.