Khiron Life Sciences Corp (CVE:KHRN) Acquires NettaGro, Secures Access to Brazilian Market

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Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

Khiron Life Sciences Corp (CVE:KHRN) (OTCMKTS:KHRNF) (FRA:4KH) President Chris Naprawa explains the significance of the company’s LOI to acquire 100 percent of NettaGrowth International Inc (NettaGro). The deal allows Khiron to cultivate up to 170,000 plants in Uruguay. While Uruguay is a relatively small market, it is part of a free trade zone with Brazil, which offers Khiron access to a massive market should Brazil legalizes cannabis. Upon completion of the deal, Joe Mimran, a successful retailer known for Club Monaco and Joe Fresh, will join Khiron’s Colombian board and will provide strategic advice on retail development.

Transcript:

Fraser Toms:  Okay, so…

Ed Milewski:  Okay. You said OH, you want me to get OH up there?

Fraser Toms:  No, I want to talk to Khiron right now.

Ed Milewski:  Oh, here we are.

Fraser Toms:  Look at that. Are you in beautiful Bogota Colombia right now?

Chris Naprawa: I absolutely am. Greetings from Bogota, it’s a beautiful day here, the weather I just absolutely perfect, and I’m glad to be on. I can’t thank you enough for the coveted 4:00 p.m. on a Friday time slot.

Fraser Toms:  No, yeah, that’s great. As you may or may not know, I was down there shooting your operation at some point last year, and you know, it’s a great place to be, Bogota, no matter what time. It’s the same all year round.

Chris Naprawa: Yeah, we don’t have seasons here. So at night, it’s maybe 9 or 10 degrees, and during the day it’s between 14 and 20. It’s very livable.

Fraser Toms:  Cool. So what’s been going on with Khiron these days? There’s been a press release I guess today, so do you want to share with the viewers what’s been going on?

Chris Naprawa: Yeah, so this morning we released our second acquisition in the last six months; we’re buying a company called NettaGrowth International. We picked up a license in Uruguay, it’s a substantial license; it allows us for 120 tonnes of product, it allows us to export dried flower, that’s up to 170,000 plants, but more importantly, that’s in the free trade zone with Brazil, so that gives us easy access into the Brazilian market. Brazil is still working out its regulations, but you know what, as always, we’re going to be ahead of the curve in getting into those markets.

But aside from license, aside from location and the uniqueness of that license, is the people that come with this deal. So most notably for the Canadian audience would be Joe Mimran, everyone knows as Joe Fresh; Club Monaco, Alfred Sung, a Dragon on CBC. Joe is an absolute retailing genius, a marketing guru by any definition, and he joins our Board of our Colombian company. Also joining from their group is a gentleman named Mike Beck; for the viewers that are more of a history in resources, Mike is a renowned entrepreneur, a private capital guy, started and sold many, many companies, and he and his partner Steve Patells have made many notable exits for billions of dollars, and we’re just so glad that he’s joined our Board.

So together we now have Chile, Colombia, now Uruguay, I think you’ll expect another location from us soon, and we’ll continue to grow the company in trying to fulfill our mission in being the dominant player in Latin American cannabis.

Fraser Toms:  That sounds great, and you didn’t even have to jump on the Dragon’s Den to prove it to anyone. So that’s awesome.

Ed Milewski:  Chris, it’s Ed Milewski here, and I’ve just looked at your stock chart here and you’re over $1.70 today; you haven’t been over that very often, but you must be doing something right, because you know, a lot of the companies I your space are sort of asleep and you guys are moving in in the right direction. Congratulations.

Chris Naprawa: Well thanks. Like, as anything, we don’t manage the stock price, but we try to create value and hope that that’s recognized over time, and we’ve been able to do that with keep the share count very, very low. We’re over 30 percent insider owned; this deal won’t change that materially one way or the other because of the insiders that are coming into our business, and we’ve been able to do that with trying to, you know, not dilute ourselves. So post this deal, we’ll have in the neighbourhood of 83 million shares basic, which is still something of a phenom to get 100 million shares out.

So a lot of building blocks have been put into place over the last twelve months. We only listed last May, May 24th, we’ve got a couple of raises since then, and now our second acquisition, so 2019 is going to be the year for Khiron. We couldn’t be more excited about it.

Fraser Toms:  That sounds great. How about an update on the Colombian grow operation? I was out there when it was sort of more or less in its infancy stage and things were being built out. What’s the status over there and plants in the ground scenario?

Chris Naprawa: Well, you know, we update our industrial website, which is investors.khiron.ca, we update it almost every week with new photographs to keep everybody up to date and see exactly what we’re doing. We have photos of the cultivation site there in Doima, Colombia. We’ve got now in our greenhouse, we just had a site visit with some investors this week, they saw, you know, big, giant, healthy plants; there’s over 6,000 of them in our main greenhouse. Construction is largely done, with extraction equipment and everything else, so you know, the vast majority of construction is behind us. So I invite investors to go and have a look on the website, there might be some videos on there as well to see the nature of it.

So we’re going to get ready for Phase II, which is the expansion; obviously we’re going to get ready for the cultivation in Chile, which is going to happen this spring and we’ll be getting to work in Uruguay just as soon as we can.

Fraser Toms:  Okay, that sounds good. And as far as Uruguay is concerned, is there going to be a cultivation going on there? Are you allowed to bring plants there? How does that work?

Chris Naprawa: Yeah, so we have a cultivation license there now; it’s the only license of its type that allows us to export CBD and THC, it allows us for up to 120 tonnes, or 170,000 plants. So we’ve got the cultivation site picked out. As far as this deal, we picked up three fabulous people that are now employees of Khiron, and they will not only help us build out our presence in Uruguay, but also work on our strategy in Brazil, so expect more from us in Brazil.

Fraser Toms:  Great. Well –

Ed Milewski:  I’ve got the chart up. Can we put the chart up quickly? Can we do that?

Fraser Toms:  I think we can do whatever we want. Yeah, sure, we’ll get the chart up there.

Ed Milewski:  Yeah, so not to take Chris off, but yeah, lookit: we’re getting close to the highs, here. And if you smoke some marijuana, you’ll get high. Look at that. Looks good, looks good. Okay, back to Chris.

Fraser Toms:  Chris, I think, just give you an opportunity to speak about the South American opportunity in general; is it something that’s still, you know, perhaps overlooked by investors who are focused on strictly Canada or even the US? Maybe sometimes South America is a little bit overlooked?

Chris Naprawa: Yeah, I think we’re vastly o0verlooked. Although a lot of people have applied for licenses here in Colombia, there’s only a very few that have reached the kind of level of cultivation that we’re at. You know, our market is 620 million people in Latin America; when you think about that for a moment, that’s larger than the Canada and US and German markets combined. But rather than having three or four hundred competitors. I have two or three that I really have to worry about in my region currently.

So that opportunity is massive. Most of our competitors are focused on low-cost cultivation for export in other markets. We also enjoy low-cost cultivation, but we’re focused on branded product sales in the region that we care about most, and in that region, we’re the only one selling CBD products in Colombia. We’ve got licenses to sell In Peru, we’ve got product approvals already in Mexico. Mexico is the biggest news in cannabis that no one knows is going on. They’ve already tabled legislation for adult use and medicinal, import/export, cultivation. So you’re going to see that happen in the first half of the year, all those rules and regulations come down. There’s a population of 130 million people, they have a massive middle class. If you look at any market, be it consumer packaged goods, cellular, automotive, Mexico would be in the Top Ten in the world in all of those categories, so why not cannabis?

So we’re very much focused on that; our director and former President Fox was here with us this week in Bogota, we’re making big, big plans for Mexico. We’re hosting a conference there next month, a medical conference that in April central Fox and ourselves we’re co-hosting Cannamexico, which will be the largest cannabis event of its type in Mexico. We invite you all down.

Fraser Toms:  You know what? Nobody here is going to turn down the opportunity to go to Mexico or Bogota, which is, you know, Bogota is fantastic.

Ed Milewski:  I think we should leave right now.

Fraser Toms:  Well, we could. Just one last thing before we let you go, Chris, when it comes to Brazil, cause you touched on it a bit earlier, what’s your thoughts on Brazil moving forward, and if you had to guess on what’s going to there?

Chris Naprawa: I’ll say the same thing about Brazil that I say about the rest of the world, is that cannabis is a global phenomenon. It’s not stopping. Like, the cat is out of the bag, and it happening everywhere, and if you look at the approval ratings on legalization of cannabis in some form, in almost every jurisdiction they’re well about 60 percent, as it is in the United States. So Brazil is a market of 240 million people, and we’re not going to wait the day the regulation comes to start to evangelize our products and services, to build relationships with doctors, to build relationships with doctors’ associations and medical associations very, very hard. There’s a lot of ground work that has ben done before you sell your first product or your first brand, so yeah, we’re doing that right now. I don’t know why we would overlook a market as substantial as that.

Fraser Toms:  All right, Chris, well, sounds good. Thanks so much for joining us all the way from Colombia today. We really appreciate it.

Chris Naprawa: Thank you s much, gentleman.

Ed Milewski:  Have a good weekend.

Fraser Toms:  There goes Chris Naprawa, President of Khiron Life Sciences.

Midas Letter is provided as a source of information only, and is in no way to be construed as investment advice. James West, the author and publisher of the Midas Letter, is not authorized to provide investor advice, and provides this information only to readers who are interested in knowing what he is investing in and how he reaches such decisions.

Investing in emerging public companies involves a high degree of risk and investors in such companies could lose all their money. Always consult a duly accredited investment professional in your jurisdiction prior to making any investment decision.

Midas Letter occasionally accepts fees for advertising and sponsorship from public companies featured on this site. James West and/or Midas Letter may also receive compensation from companies affiliated with companies featured on this site. James West and/or Midas Letter also invests in companies on this site and so readers should view all information on this site as biased.

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