VIDEO: Khiron Life Sciences Inc: The Next Cannabis Company to Invest in Could be in Colombia

With cheap labour and low cost labour, Canadian and Colombian company Khiron Life Sciences Corp. will soon be joining the TSX.V venture. CEO Alvaro Torres explains how Colombia is a huge opportunity for investment in marijuana.


James West: Alvaro, thanks for joining me today.

Alvaro Torres:  Thank you James, I appreciate your having me here.

James West: Sure. You’re the first grower of cannabis in Colombia, the first licensed grower, correct?

Alvaro Torres: We are one of the first. We certainly worked very hard in the third quarter of last year to get one of the first licenses for cultivation and extraction of high and low THC.

James West: Okay. So this is for medical purposes only?

Alvaro Torres: Yes. It’s only for medical, only extracts, which is the way the Colombian regulation.

James West: Oh, only extracts? No bud?

Alvaro Torres: No bud, as you can imagine.

James West: Oh, right, Colombianos.

Alvaro Torres: Right. I think the government just wants to make sure that we could separate this illegal aspect with this new industry. That is why they tell us extracts only.

James West: Interesting. And so what’s the population of Colombia?

Alvaro Torres: 50 million almost.

James West: 50 million – so that’s bigger than the Canadian market, bigger than the California market.

Alvaro Torres: You have 80 companies here in Canada compared for 35 million people in a market that’s 20 billion, and talk about Colombia with, right now, a few players, 50 million people. We did all our studying, we found there’s about 6 million people, patients, that are consuming products for opiate-based medication for chronic pain, epilepsy, PTSD. By itself it’s a fantastic market.

James West: Yeah, sure, okay. So how did Colombia come to embrace the concept of legalized medical marijuana?

Alvaro Torres: I think there’s a couple of factors on that. I would say, two years ago the government started looking at these regulations because as you know, the world was starting to evolve, and the commodity prices were dropped down, oil price, all of these. And the government’s looking for another way to generate a new industry to generate more income as the oil prices come down.

So, how do we create an industry, how to create new companies coming in, more investment.

So the medical cannabis thing comes from two aspects, I would say. First is that in Colombia, Latin America in general, all of these medications opiate based is extremely expensive, and it also could create a health problem like United States. So that’s one aspect. And the other one is, the world is evolving; Colombia also wants to shed those images of 25 years ago.

James West: Sure. Narcos.

Alvaro Torres: Ethnic shows of Narcos Season 1, 2 and 3. They want to shed the reputation and start looking at a very medical side. I think that’s the reason why they started doing this, and they came out with a very interesting and very transparent and very advanced regulation. Because in Colombia, regulations allows you to cultivate, extract, export and domestic sales, all in one nice, easy process.

So it was very exciting. I think the government took some time to really evaluate how to make it work. So we actually started from the law. So the Congress actually approved the law to make medical cannabis legal, and from then on, the government just started working on the regulations.

James West: Wow. Okay. So the cannabis cost of cultivating cannabis in Colombia – boy, that’s almost a tongue twister – is probably very low, I would think, because you have pretty much the same amount of daylight all throughout the year.

Alvaro Torres: Yeah, so, I mean, regularly, Colombia is one of the biggest countries of cut flower exports, and also coffee and plantains and all of these, because we have the polar sunlight. We are near the equator, so it’s always the same weather, it just says whether it rains or it doesn’t rain. And that makes it, in terms of when you’re cultivating, much cheaper to produce, because you don’t have to simulate conditions like you have to do in Canada. Because you have the weather, you have lots of water, the labour is cheap, but also because we are only in an extract business; all these high costs of trimming the flower that you have in Canada because you are selling the bud, that all sort of goes away, because you are only selling the extracts.

So it’s a very good low-cost advantage, but also couple that with a very high population. So it’s a very good, interesting business to be in.

James West: Yeah, you bet. So is there ambition on Khiron’s part to do exports?

Alvaro Torres: Well, our ambition is to first dominate the Latin American market. Latin America is 600 million people, and Colombia has the right reputation in terms of the medical community, so we have a very high level 4 World Health Organization FDA, that means that everything that Colombia sort of approves, it gets whatever stamp in the rest of the countries. So it’s law because the low cost, but just the reputation of the medical community. And Mexico, Argentina, Peru, Chile, Brazil, all of these countries are now starting to regulate medical cannabis; Mexico and Argentina have only two months ago passed law to legalize the extracts for medical cannabis.

So my goal is to be able to position the company as a dominant player in that region, because you know, we understand the culture, we know, I’ve been doing business in Latin America all my life. And being Colombian and being from the region and being able to be a Canadian company as well, which is here in Toronto, sort of bridges that level of trust with the governors and presidents and start talking about how we can implement our business there.

So the Latin American thing is going to be our first and foremost market.

James West: So all of Latin America will be smoking Colombian Gold soon enough?

Alvaro Torres: Well, not smoking it, but certainly…

James West: Oh, of course, not smoking it! Okay, well, and so Khiron itself is publicly traded in Canada?

Alvaro Torres: It’s going to be publicly traded, we just announced our RTO deal; that’s our shell. We just announced our third round of financing on the pre-going public; we raised $11 million. We were hoping for six, so it’s very successful for us, almost double, and I guess to go public by the end of this quarter on the TSXV.

James West: Excellent. Okay, well, that’s great. We’re going to follow with interest. Thanks so much for your time today.

Alvaro Torres: Thank you so much. I really appreciate it, thank you.

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