Aphria Inc. Nearing Big Cannabis Grow Investment in Colombia

Benjamin A. Smith
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If local reports are true, Aphria Inc (TSE:APH) (OTCMKTS:APHQF) (FRA:10E) is about to make a significant land purchase in Colombia. It’s yet another indication that the company has its sights set internationally, well before the domestic market takes shape.

According to El Tiempo, Aphria is scoping out suitable outdoor cannabis grow locations for the purpose of serving local markets and export. In a sitdown interview with company CEO “Victor Jacob Neufeld”, the company front man revealed that officials “plan(ned) to travel to Chinchiná (Caldas) to see a plot of approximately 15 hectares where we want to start cultivating.”

That equates to over 1.6 million square feet (1,614,586 sq. feet) of potential grow space, should the whole property be purchased and utilized for such purposes.

While it’s unlikely that the entirety of such a land package would be used to grow cannabis, the emerging grow operation would be substantial. Such an operation—grown outdoors might you—would likely rival some of the largest indoor Canadian grow operations like Aurora Sun (1.2 million sq. feet) and Canopy Growth’s massive 1.3 million grow facility in Langley, British Columbia. Some operators call the latter the largest licensed cannabis production facility in the world.

Also disclosed was the approximate size of Aphria’s initial Colombian investment: around $20 million dollars. That would presumably be enough money to purchase the property, hire “40 or 50 employees”, and erect the necessary production facilities and corporate headquarters to lay down permanent roots.

Aphria CEO VIc Neufeld extolls the virtues of his international strategy and cannabis growing operations

As Vic Neufeld elucidates in the interview, the decision to operate in Colombia was a measured and calculated one. It involved close examination of which countries were beginning to adopt favorable medical cannabis frameworks, horticultural considerations (i.e. climate), local partnerships and export potential. All told, Aphria adopted a similar 4-phase plan used to build-out their burgeoning Canadian operations.

We expect the race to build giant grow facilities in South America won’t begin and end with Aphria. With ideal climatic conditions, inexpensive unit labor costs, favorable regulatory frameworks and low production costs (exports), other Canadian LPs will follow suit.

But Aphria is once again showing that it’s ahead of the curve. Soon, that curve will lead to something north of 10 hectares of cannabis grow in the sunny confines of South America.

Update: A second Colombian journal, La Republica, indicates that Aphria has already purchased “more or less” 15 hectares in Chinchiná, Caldas. The company hopes to have its cultivation licensing in order by the end of July.

Benjamin A. Smith

Benjamin A. Smith

Ben is a research analyst and capital markets professional with nearly 20 years of experience. His areas of expertise are broad-based, and include extensive knowledge of macro economics, stock/derivative trading, commodity complexes, cryptocurrencies and technical/quant analysis. He also maintains an particular affinity for U.S. politics and the macro-regulatory environment facing...
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