A pair of bulletins this week from a small hashish firm backed by business powerhouse Aphria Inc. level to rising curiosity in South America from Canadian marijuana firms.
Scythian Biosciences Corp., which counts Aphria as its largest shareholder and is chaired by Aphria CEO Vic Neufeld, introduced Monday its intention to accumulate Ontario-based MMJ Colombia Companions Inc., which is within the course of of shopping for a Colombian hashish firm.
It additionally introduced that an Argentinian firm it’s making an attempt to purchase has secured a license to import hashish oil into Argentina for medical analysis. The oil shall be equipped by Aphria.
Each offers are small, unsure steps, and are conditional upon a number of different offers closing.
However they’re a part of a wider development of transactions which have seen Canadian hashish executives heat to the probabilities of South American markets.
These alternatives — Latin America is each a doubtlessly giant medical market and a supply for low-cost agricultural exports — have for months been eagerly pitched by smaller Canadian or Canadian-financed hashish firms energetic in South America.
“It simply doesn’t make sense to spend $10 million retrofitting a warehouse in Paris, Ontario to develop hashish. It simply doesn’t make agricultural, agronomic sense,” mentioned Michael Galego, director of ICC Labs, which operates a facility in Uruguay, the primary nation on the planet to permit authorized leisure hashish. “We need to be a wholesale, low-cost producer for any Canadian LP that wishes us.”
His firm, which intends to give attention to hashish extracts like cannabidiol (CBD) oil for export, has signed provide offers with Ontario licensed producer Emblem Corp. and Nuuvera Inc., which was not too long ago acquired by Aphria.
Whereas Uruguay leads the pack when it comes to legalization, a number of different South American nations are shifting towards broader acceptance of medical marijuana. It’s now authorized in Argentina and Chile, in addition to in Mexico, though it must be imported and might solely be prescribed for a restricted variety of illnesses.
“The markets haven’t opened up as shortly as we thought they’d, however I believe finally we’ll get to a spot the place it’s extra prevalent in Argentina and Brazil, and that’s 300 million plus folks,” Galego mentioned.
Colombia, with its low-cost equatorial rising local weather, and lengthy, although troubled, expertise with narcotic cultivation, goes additional, permitting in-country hashish rising.
“When you break down the limitations for the nations, you begin speaking in regards to the market measurement, you begin speaking in regards to the alternative for progress, Colombia might place itself … to take over that complete area,” mentioned Alvaro Torres, CEO of Colombia-based, Canadian-financed Khiron Life Sciences Corp.
In distinction to different Colombian hashish performs centered totally on low-cost rising, Torres is making an attempt to construct a value-added medical model by investing in clinics and internet hosting medical conferences. Nonetheless, “ultimately it is a plant that grows naturally in these nations,” mentioned Torres.
It’s not solely area of interest firms which are eyeing South America. Cover Development Corp., the most important Canadian hashish firm, has established a foothold on the continent by way of Bedrocan Brazil and Spectrum Chile.
“Cover owns 85 per cent of Spectrum Chile S.A. and is conducting analysis and growth actions in Santiago. In Brazil, Cover owns roughly 39 per cent of Bedrocan Brazil S.A., which facilitates the importation of hashish into the Brazilian market, and roughly 38 per cent of Entourage Partiçipaões, which is conducting analysis and growth actions in Sao Paulo, Brazil,” in accordance with Cover’s most up-to-date prospectus providing from January.
“Cover was an early mover into Latin America and we proceed to view Spectrum Chile and Bedrocan Brasil as vital elements of our worldwide growth technique as these markets develop,” Cover’s communications supervisor Jordan Sinclair wrote in an emailed assertion.
Then there’s Hashish Wheaton Revenue Corp. which purchased a property in Uruguay earlier this yr, and Tilray Inc. and Medreleaf Corp., which have shipped medical merchandise to Chile and Argentina, though on a restricted foundation.
Regardless of the curiosity, nonetheless, it’s unclear how these medical markets will develop over the following few years, and, as with different worldwide performs, there’s appreciable regulatory threat. You solely must look to Germany, the place Canadian firms have been left in limbo after a German courtroom halted the federal government’s licensing course of for in-country cultivation.
“I don’t know politically that the following (Colombian) president gained’t retrench a number of the advances they’ve made (on hashish legalization),” mentioned Galego of the presidential election occurring this yr.
A Scythian spokesperson mentioned nobody was obtainable to remark, and Aphria didn’t reply to a request for remark.