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Cannabis Companies Pursuing Growth Set Sights on Latina America
FinancialBuzz.com News Commentary
NEW YORK, Feb. 28, 2019 /PRNewswire/ --The Latin America region has become highly sought after for cannabis businesses due to the opportunities it represents. Around the globe, many cannabis businesses have moved to establish operations in LATAM because of the area's low cultivation costs and fertile farming lands, as countries including Peru, Chile, Argentina, and Colombia have all passed favourable medical cannabis laws. Meanwhile, Uruguay has entirely legalized cannabis for both recreational and medical use. Now, Mexico's newly elected President is considering nationwide legalization of cannabis as well. According to data compiled by Prohibition Partners, the LATAM cannabis legal sales were estimated at USD 125 Million in 2018 and are expected to reach USD 12.7 Billion by 2028. Medical cannabis is expected to account for more than two-thirds of the legal cannabis industry in the LATAM region, delivering an estimated USD 8.5 Billion throughout the forecast period. Countries such as Colombia and Chile in particular are expected to be the major growth drivers for the region. Blueberries Medical Corp. (OTC: BBRRF) (CSE: BBM), PharmaCielo Ltd. (OTC: PHCEF) (TSX-V: PCLO), Khiron Life Sciences Corp. (OTC: KHRNK) (TSX-V: KHRN), Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON), Aphria Inc. (NYSE: APHA) (TSX: APHA) .
Other nations within the region are also expected to legalize medical cannabis, following in the footsteps of countries to have already done so. The data suggest that the prospective market has over 500 million adult use customers and 4.3 million patients using medical cannabis. The numbers show that the LATAM region is a core priority for cannabis companies moving towards global expansion. "With the forthcoming legalisation of Canada's recreational cannabis market, all eyes have been on North America, but actually it's the Latin American region that has quietly been carving out industry firsts," said Stephen Murphy, Managing Director at Prohibition Partners, "We believe that the expansion of a Latin American market will significantly impact the global cannabis industry, undercutting producers and pricing worldwide. Strong forecast population growth, a perfect climate for cannabis cultivation, bolstered by progressive legislation and regulatory change are set to ensure Latin America remains a very attractive prospect for cannabis companies, and investors."
Blueberries Medical Corp. (OTC: BBRRF) (CSE: BBM) is also listed on the Canadian Securities Exchange under the ticker (CSE: BBM). Earlier this week the company announced that, "it has entered into a letter of intent (the "Agreement") for a joint venture (the "Joint Venture") with India Colorada S.A.S., ("India Colorada"), one of the leading Colombian artisanal brewers and producer of the oldest craft beer in Colombia, Cerveza Colón, to research, develop and commercialize non-alcoholic cannabis-based beverages.
'As consumer preferences continue to evolve away from smoked flower and towards healthier and more convenient products, we plan to be on the leading edge of innovating and commercializing these new product segments,' stated Camilo Villalba, Chief Operating Officer of the Company. 'We believe that our first mover advantage, combined expertise, and dedication to the highest standards of product quality, will position Blueberries as a leader in this rapidly emerging market.'
The Joint Venture is expected to undertake the research, development and commercialization of non-alcoholic cannabis-based beverages with the goal of being first to market in Latin America. Pursuant to the Joint Venture, both companies will apply their respective expertise toward the research and development of beverages containing tetrahydrocannabinol (THC), the psychoactive chemical compound in cannabis, as well as cannabidiol (CBD), the non-psychoactive compound. The Joint Venture is expected to commercialize newly developed cannabis-based beverages through India Colorada's established and growing distribution channels in addition to Blueberries' distribution channels. The Joint Venture will make decisions regarding commercialization of the products in different countries where permitted by regulation on an individual market basis. Pursuant to the terms of the Agreement, the parties intend to complete the development of new products and commercialization plan over the following 12 months. India Colorada is arms'-length to the Company.
About India Colorada S.A.S.: India Colorada is the owner of Cerveza Colón, the oldest craft beer brand in Colombia, and has an aggressive growth plan over the next 10 years which includes the renewal of the Cerveza Colón image, and the formulation of additional new recipes. For more information, please visit www.indiacolorada.com.
About Blueberries Medical Corp.: Blueberries is a Colombia-based licensed producer of naturally grown premium quality cannabis with its primary operations ideally located in the Bogotá Savannah of central Colombia. Led by a specialized team with proprietary expertise in agriculture, genetics, extraction, medicine, pharmacology and marketing, Blueberries is fully licensed for the cultivation, production, domestic distribution, and international export of CBD and THC-based medical cannabis. Blueberries' combination of leading scientific expertise, agricultural advantages and distribution arrangements has positioned the Company to become a leading international supplier of naturally grown, processed, and standardized medicinal-grade cannabis oil extracts and related products."
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PharmaCielo Ltd. (OTC: PHCEF) (TSX-V: PCLO) is a global company, headquartered in Canada, with a focus on ethical and sustainable processing and supplying of all natural, medicinal-grade cannabis oil extracts and related products to large channel distributors. PharmaCielo Ltd. recently announced that its Colombian subsidiary has received approval for the listing of 10 proprietary and unique tetrahydrocannabinol (THC) and cannabidiol (CBD) strains with the national cultivar registry. The Company can now proceed to commercial registration, production and sale of these strains within Colombia as well as for export to global markets. "Approval of these strains strengthens and confirms PharmaCielo's position as the leading producer in Colombia," said Federico Cock-Correa, President and Chief Executive Officer of PharmaCielo Colombia Holdings S.A.S. "Among those approved is an historic and unique CBD-dominant strain approved for commercial registration and sourced from the Colombian landrace strains held within our fuente semillera, the first and only one of its kind registered in Colombia."
Khiron Life Sciences Corp. (OTCQB: KHRNK) (TSX-V: KHRN) is positioned to be the dominant integrated medical cannabis company in Latin America. Khiron Life Sciences Corp. recently announced that the Company has entered into a binding letter agreement dated January 24, 2019, to acquire 100% of NettaGrowth International Inc., an arm's length party, which will own, at the time of completion of the transaction, all the outstanding shares of Dormul S.A. (doing business as Cannapur). Dormul has obtained the first licence to produce medical cannabis with THC for commercialization in Uruguay. With this acquisition, Khiron will be able to significantly expand its cultivation capacity to a third jurisdiction, and through the Mercosur Regional Free Trade Bloc, will gain access to an export market of approximately 75 million people in Southern Brazil. As consideration for the acquisition of NettaGro, Khiron will issue 8,498,821 common shares to the shareholders of NettaGro, at a deemed price of USD 1.61 per common share. Alvaro Torres, Khiron Co-founder and Chief Executive Officer, stated, " This acquisition marks a significant advancement on our strategy to serve the largest markets in Latin America. Like us, NettaGro is a market innovator that is shaping how and where the cannabis industry grows across the region. Welcoming Joseph Mimran and Mike Beck ensures we execute on the potential that NettaGro offers, bringing us exceptional global expertise and unmatched market access."
Cronos Group, Inc. (NASDAQ: CRON) (TSX: CRON) is a globally diversified and vertically integrated cannabis company with a presence across four continents. Cronos Group Inc. recently announced that it has entered into a joint venture agreement with an affiliate of Agroidea SAS, Colombia's leading agricultural services provider with over 30 years of research, development and production operations. This partnership establishes a newly formed entity, NatuEra S.à r.l., in Colombia that will develop, cultivate, manufacture and export cannabis-based medicinal and consumer products for the Latin American and global markets. "We searched extensively for the right partner in Latin America. In AGI we have found an executive team with immense experience in running large scale horticultural operations and serving the needs of large, sophisticated international clients which will be crucial in establishing consistent and efficient supply chains for cannabinoid based products," said Mike Gorenstein, Chief Executive Officer of Cronos Group. "By leveraging AGI's expertise and Cronos Group's cannabis know-how, NatuEra will enable Cronos Group to create a cultivation and manufacturing hub in Latin America for our global distribution channels in a manner that minimizes region-specific and execution risk."
Aphria Inc. (NYSE: APHA) (TSX: APHA) is a leading global cannabis company driven by an unrelenting commitment to our people, product quality and innovation. Aphria Inc. recently announced that its Colombian subsidiary, Colcanna SAS has signed an exclusive agreement with the Federación Médica Colombiana, a national guild that oversees the ethical exercise of the medical profession in Colombia, to jointly develop an academic curriculum on the medicinal use of cannabis. The FMC has nearly 2,000 affiliated doctors and a database of more than 70,000 medical professionals that access the organization for research and educational resources, including through a virtual platform that offers certified courses on a range of subjects. The medical cannabis curriculum developed by Colcanna and FMC will be made accessible on this platform and will be supported by scientific events for the medical community. "Education in the medical community is critical for sustaining the advancement of medical cannabis in Colombia" said Gabriel Meneses, Vice President, LATAM & Caribbean at Aphria. "Colcanna is proud to make this exclusive arrangement with Federación Médica Colombiana, which will offer doctors and medical professionals across the country a credible and trusted source of information and training on medical cannabis."
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