Rare Colombian Cannabis Stock up 71%

Latin America is in position to grow into one of the largest medical cannabis markets in the world.

According to The LATAM Cannabis Report™ from well-respected market research firm Prohibition Partners, medical cannabis sales in Latin America will explode to $8.5 billion in the next ten years, up from just $125 million in 2018.

The report suggests that Latin American growers could undercut the entire global cannabis market because of three key factors:

  • inexpensive land
  • ideal weather conditions for growing cannabis
  • access to cheap labor

This potential low-cost alternative to cannabis cultivation in Canada and North America has the potential to transform Latin America into a global leader in cannabis exports.

Additional key details from the report:

  • Medical cannabis will account for more than two-thirds of the legal cannabis industry in Latin America, worth an estimated $8.5 billion.
  • The cannabis sector is set to grow by over 300% per year over the coming decade.
  • There are over 40 licensed producers in the region. Colombia has issued the most cultivation licenses in the region, with over 142 licenses to date.
  • Facility and construction costs are 80% lower than in North America and Europe.
  • Chile and Mexico will be engines of growth in the medical sector while Uruguay and Colombia will encourage region-wide recreational cannabis legislation.
  • Patient numbers will increase significantly to over 4.6 million by 2028.

Young cannabis companies operating in South America – and particularly in Colombia – are prepared to ride this explosive wave of growth.

Today I am going to share one company that has caught my eye because they are…

  • one of the first to land a permit to grow cannabis in Colombia.
  • rapidly expanding production.
  • securing partnerships with leading cannabis edible companies for exclusive distribution rights.

Khiron Life Sciences (KHRN, KHRNF), is a Canadian-based cannabis company that is making big moves to cash in on the high-growth Latin America and Colombian cannabis markets.

Shares began trading on the Toronto Venture Stock Exchange in October of 2018 under the ticker symbol KHRN. I see average daily trading volume of a few million so this ticker is plenty liquid.

I also see a US-based ticker KHRNF. I see average daily trading volume of 320,000 so, once again, this ticker should be plenty liquid.

Khiron Was One of the First Licensed Medical Cannabis Companies in Colombia

After Khiron became one of the first companies to land a medical cannabis license, they quickly invested millions to ramp production. Khiron currently has cultivation operations in Colombia, Chile, and Uruguay. Take a look at the image below from Khiron.

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Khiron Recently Inked a String of Partnerships that Should Drive Revenue Growth

On January 30, Khiron announced an exclusive Latin American distribution deal with an early leader in the US cannabis edibles market. Here are some more details from the press release.

Dixie Brands Inc. (DIXI) Khiron Life Sciences Corp. have signed a binding letter of intent to establish a 50/50 joint venture (the “JV“) to introduce a full line of cannabis-infused products to the Latin American market. Dixie will also manufacture and distribute Khiron’s Kuida® brand of cannabidiol (CBD)-based cosmeceuticals in the United States, targeting the growing Hispanic population.

  • Establishes Khiron as Latin America’s CPG leader with the addition of over 100 product SKUs across 15 categories immediately available to commercialize into Latin American pharmacies and retail outlets
  • Gives Khiron immediate access to Dixie’s portfolio of proprietary formulations driven by years of product development and brand building in existing federally legal markets
  • Accelerates Khiron’s high margin product strategy in Latin America and positions Khiron as the cannabis CPG and Pharma focused leader in the region, combined with its scaled low-cost cultivation strategy
  • Provides Dixie with immediate entry into Latin America with Khiron, a highly recognized strategic partner with strong distribution relationships that will drive immediate product penetration in this lucrative and sizeable market of 620 million people

In September, Khiron announced a deal to enter the Chile market through a partnership with Fundacion Daya, Chile’s leading medical cannabis institution and the holder of Chile’s only medical cannabis license through DayaCann, a joint venture entity established between Fundacion Daya and AusCann Group Holdings Ltd.

Here are some more details from the press release.

This proposed collaboration and services agreement with Fundacion Daya complements Khiron’s stated focus to market high quality and clinically validated medical cannabis products. Upon closing of the partnership, Fundacion Daya and Khiron expect to:

  • Cultivate a minimum of 5 tonnes of dried flower in Chile exclusively for Khiron to be used to formulate two products targeting patients with neuropathic pain and epilepsy;
  • Commence clinical trials led by medical teams directed by Khiron and Fundacion Daya;
  • Manufacture products at a GMP lab to be constructed by DayaCann. It is anticipated that the lab will be completed in 2019; and
  • Target distribution of products by the first quarter of 2020.
  • Khiron will provide Fundacion Daya the equivalent of $1 million USD over a period of 2 years

Khiron Shares have Been Hot in 2019

Khiron has been rallying with the broad cannabis sector in 2019, up about 70%. Shares look overbought in the short run, but in the long run, I see plenty of growth potential.

latin america


Michael Vodicka
Editor, Cannabis Stock Trades

The information contained in this post is for informational and educational purposes only. The trading ideas and stock selections represented on the Cannabis Stock Trades website are not tailored to your individual investment needs. Readers and members are advised to consult with their financial advisor before entering into any trade. Cannabis stocks carry a certain level of risk and we accept no responsibility for any potential losses. All trades, patterns, charts, systems, etc. discussed are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author and do not necessarily reflect those of the publisher.

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