Chemesis in Colombia: The Place to Be for South American Cannabis, Plus Exclusive CEO Interview
February 28th, 2019
Exclusive, News, Top Story
Cannabis industry research firm Prohibition Partners anticipates the legal cannabis industry in Latin America will reach $12.7 billion in annual sales by 2028. Uruguay led the way in the legalization movement, making recreational cannabis legal in 2013. No other countries have made that step, but several have legalized medical programs in the years since. Still, Colombia is currently the only country whose government is aggressively promoting cannabis exports, making that country the current hot spot for cannabis development.
One company aggressively moving on the opportunity in Colombia is Chemesis International Inc. (CSE: CSI) (OTCQB: CADMF) (FRA: CWAA). Chemesis owns a licensed cultivator there, growing on more than a thousand acres as well as in a 10,000 sqft greenhouse. The company is also building a GMP-certified production lab and extraction facility in Bogota with an eye toward both the Colombian domestic and the international export markets.
Chemesis International CEO Edgar Montero discusses the company’s operations in Colombia and its presence in Puerto Rico, among other things, in Part II of CFN Media’s exclusive interview.
In early 2018, the Colombian government’s Drug Control Fund authorized the harvest of up to 40.5 tons of medical marijuana for export purposes. The agency estimates that at full capacity, the country could supply about 44% of the world’s current demand for medical marijuana products. The program is just getting off the ground, however, and the country is a long way from reaching that production level.
The combination of a government-directed focus on exports, an ideal growing climate, and very low cost of production makes Colombia a crucial focus for near-term development. The country also boasts a population of about 6 million medical marijuana patients. One interesting aspect of the country’s laws is the general prohibition on the sale of cannabis flower. Companies operating there are necessarily focused on oils and extracted products, areas of the market that offer higher margins and are generally more attractive to consumers anyway.
Chemesis’ Colombian Operations
Chemesis has been working closely with the Colombian government since acquiring subsidiary La Finca Interacviva-Archna Med SAS to expand its existing licensed operations in the country. La Finca is currently licensed to cultivate, produce extracted products, and distribute those products domestically. La Finca is a founding member of Colombia’s Association for the Promotion of Hemp Growing, and has established relationships with over 2,000 farming families throughout the country. It is partnered with Colombia’s largest university for research and development, and is involved in farmer education programs across the country.
La Finca currently offers cannabinoid-based cosmetic products and is expanding its product lines as the company grows. La Finca anticipates achieving export capabilities upon completion of its GMP-certified production facility in Bogota, opening up a much wider market for its derivative product lines.
Colombia recently announced a renewed focus on prosecuting the cannabis black market in the country, which has only solidified the country’s legal medical program. That program is just finding its legs, and many companies establishing operations there are kind of building from scratch in a market still in its infancy. By acquiring La Finca, a company that has been operational in Colombia since 2017 and has extensive relationships throughout the country, Chemesis has positioned itself as a strong early mover in what could prove to be an international hub of low cost, high quality, high volume production for the international cannabis market.
Investors may want to keep an eye out for Colombian developments as the company also expands its existing operations in the California and Puerto Rico markets. Chemesis’ focus on cannabis extracts and derived products in key markets looks promising as demand rises across the globe.
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