VIDEO: Former Mexican President Appointed to Khiron Life Sciences Corp (CVE:KHRN)
Khiron Life Sciences Corp (CVE:KHRN | OTCMKTS:KHRNF) President Chris Naprawa expresses the value proposition the company offers the Colombian and Latin American cannabis markets to attract high-level executives to the company. Khiron has recently appointed former Mexican President and Coca-Cola Latin America CEO Vicente Fox to the Board of Directors as well as former Chief of Pharmaceutical Investigations for the Drug Enforcement Administration Matt Murphy as Vice President, Compliance. The management team provides the foundation for Khiron to be a success in the medical cannabis market at home in Colombia and expanding to continental South America. The President also describes their advantage of having a lead inside Colombia and Latin America compared to other companies moving into the market place, most recently Aphria Inc (TSE:APH | OTCMKTS:APHQF | FRA:10E).
Ben Smith: We’re here with Chris Naprawa of Khiron Life Sciences Corp. They trade on the TSX Venture under the ticker KHRN. Hello Chris.
Chris Naprawa: Hello, thanks for having us.
Ben Smith: Great! Now, let’s start with the big news release today. Khiron just announced former Mexican President Vicente Fox was added to the Board of Directors. How the heck did a 15 million dollar market cap company pull that off?
Chris Naprawa: Well I think when you talk about Khiron and if you’re surprised about our appointment today then get used to being surprised more often. Mr. Fox has been a massive advocate for medical cannabis. He believes in helping people and giving them the highest quality of life possible. Our business is very much focused on becoming the dominant player in medical cannabis in Latin America. I think Mr. Fox saw that.
We met at a conference that we co-sponsored, a relationship built very quickly after that. He saw what we saw. He loves the people involved. We’ve got just an absolutely world class staff. Don’t be fooled by the market cap. There’s the caliber of the people and quality of our business plan and Mr. Fox certainly saw that. Before being President of Mexico, he was President of Coca-Cola. He certainly has contacts all around the world. He’s a recognizable brand and an obvious value add for our business.
Ben Smith: Okay, is there any indication why he chose to join the Board of Directors at Khiron as opposed to taking some other opportunities? Now, he may be on the Board of Directors elsewhere that doesn’t preclude that, but do you know what in particular attracted him to the Khiron story?
Chris Naprawa: Well clearly he’s very smart and insightful. We’ve put together an incredible team that’s focused on the unmet medical needs of 620 million people in Latin America. That is a big job and to be able to do that job we need outstanding people and bringing Mr. Fox on our Board, I think is further evidence we’re able to acquire these people and figure out ways to work together to attack this massive opportunity as a team.
Ben Smith: Okay. Does that mean now that Vicente Fox is on board that Khiron is part of the never-Trump club? How does politics work out?
Chris Naprawa: I think we’re part of the club of helping Khiron become the dominant player in Latin America in medical cannabis. That’s what we’re all on the same team for. Personal politics aside you know everyone has a different view but we are focused on that number one thing which is the patient. All the evidence is so overwhelming on how people can be helped. The biggest indication we’re attacking in chronic pain. Thirty percent of adults whether in North America or South America, 30% of adults have some sort of chronic pain in their life. Cannabis in different formulations has been overwhelming proven to help with that and it’s an alternative to the opioid program, it’s an alternative to other forms of medication. It’s non-invasive its natural and it’s something people need access to.
With our home base in Colombia where it’s federally regulated on the medical side much like it is here at home; we’re hoping that same sort of regulation comes to Mexico. I was just down in Mexico City. It’s a city of 35 million people and why not focus on the largest markets when you’re going these kinds of businesses.
Ben Smith: Okay. Now the thing that struck me with the Fox board of director appointee is that this is not the first high level person that you’ve managed to procure on your company’s directorship. Of course you have Matt Murphy who the former chief of Pharmaceutical investigations for the Drug Enforcement Administration. So, again it seems the quality of personnel you’re bringing on is sort of unparalleled for a company your size. Now, is that an attractive value proposition for investors having these high-level people in all the right places?
Chris Naprawa: Our business like every other business is a people business. If you’re going to build something substantial you need a really solid foundation and that foundation is an incredible core of people. Matt Murphy is an example of that. Matt is passionate about our business and medical cannabis. Even though we’re a very small company, our compliance and security has been set up to a US DEA standard. We can go into the consulting business just on that part of our business alone.
Matt is an incredible hire. If you went through our slide deck and looked at all of our executives, our management team, right across the board we could talk about each and every one of them bringing an incredible skillset. If you look back to the medical cannabis business here in Canada about 130 so companies that sprawled out of that, if you could do it all over again wouldn’t you do it in a place with a much larger market? with much less competitions? in a climate more conducive to growing this medicine.
Once in a awhile in life and in investing you get to have a second chance at things and we have a second chance at the medical cannabis market here in Latin America and it’s a much bigger opportunity than the domestic one that we saw several years ago.
Ben Smith: Terrific. Now speaking of that opportunity, I believe Colombia has 6 million medical patients just on its own. So, expanding that out to the rest of South America and the Continental Latin America, how big is this opportunity really?
I know investors know it’s rather really large but is it, even scratching the surface based on what Khiron can do and to exploit that opportunity. How do you do it?
Chris Naprawa: We spend a lot of money and a lot of time making sure that we understood our primary market being Colombia. We hired an outside consultation group. We did extensive studies and we looked at the population base. If you look at the population base of Colombia, of over 50 million people then take the number of people that are diagnosed with the indications we care most about and then look at the people that are actually being treated for that it comes out to about 6 million people as our potential market.
It’s very much focused on the patient and trying to figure out who that patient is and how we can bring them onboard as a patient. It starts with the medical associations. Doctors won’t prescribe what their association doesn’t endorse so we have endorsements from all kinds of associations in Colombia. Too many to list here today. We’ve got know over 3000 physicians that have gone through our education program or continuing to go through our education program. Of those doctors, that represents a half million in potential patients for us. Of course we’re not going to get all of those patients of day one but still very early days for us.
We’re executing a program that is understandable for the doctors and repeatable in other jurisdictions beyond Colombia.
Ben Smith: Okay, speaking of all those partnerships you’re fomenting in Colombia and abroad in South America, how does the company plan to insulate themselves with other sort of bigger players, bigger LPs coming into the market at some point?
You may have seen Aphria’s announcement today in which they’re acquiring a bunch of assets in different Latin American countries. How does Khiron plan on insulating themselves and protecting their market share when some of the other big players come in?
Chris Naprawa: I think first of all its always good to play from a lead and right now we do have a massive advantage compared to others in the market place. We’re a company first and you can check the boxes on many things we’ve been first for; licensing and cultivation, we’re the first non-resource company out of Colombia to list in Canada. That’s no small feat either. I think how do we protect ourselves and how do we prosper? We prosper
We prosper on execution. I sit up here in Toronto and it’s an easy story for me to tell but there’s 50 people down in Colombia that are executing every single day and not only protecting our league but enhancing it.
Ben Smith: Okay sounds great. In terms of your medical grow operation I understand it’s pretty big down there or will be? Can you describe how many kilograms you’ll be pumping out annualized once that gets operational if it isn’t already.
Chris Naprawa: So, when it comes to the cultivation of the plant and making of the medicine, I’m happy to talk about that but really what we’re focused here on is the patient and our long-term goal is to get to about a million patients. We have access to enough infrastructure to be able to cultivate that on our own. Talking a little more broadly on why Colombia; if you had to pick the perfect place, you would go to Colombia.
There’s a reason why we don’t grow bananas and coffee in a warehouse in Mississauga, it doesn’t make any sense. In Colombia you have 12 hours of daylight, 12 hours of nighttime, perfect temperatures 365 days a year. It’s perfect for cultivation of many kinds of plants including cannabis. So, the costs are very, very low and we can debate rather they are 5 cents, 10 cents or 15 cents but it’s much, much lower. Our trick is not to battle the cost curve, our trick is to make sure the consistency is there, that medicine is the same every single time over and over again. As far as expanding our cultivation that race has been proven already that Colombia is absolutely the ideal place to cultivating cannabis
Ben Smith: The outdoor cultivation of cannabis, does that lend itself well for consistent medical grade CBD or THC?
Chris Naprawa: We’re not outdoor, we’re in a greenhouse. We’re in a protected GMP environment. Everything is to GMP standards. It’s a very controlled environment but it’s just less costly when you’re not battling the outside elements like you do up here in Canada
Ben Smith: Excellent. Well we’re going to leave it here. Chris, thank you for joining the show.
Chris Naprawa: Thank you
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