Khiron initiates construction of cultivation facility in Uruguay
Khiron (TSXV: KHRN) (OTCQB: KHRN) has initiated construction of a cultivation and processing facility in Uruguay.
The facility, located in Juan Lacaze, Uruguay, will include a Good Agricultural Practices (GAP)-compliant, 8,000 m2 cultivation area and a Good Manufacturing Practices (GMP)-compliant 1,800 m2 processing plant with a production capacity of seventeen tons or 15,400 kg per year. KHRN entered Uruguay through the acquisition of NettaGrowth. Uruguay, a member of the Mercosur trading bloc that provides KHRN with access to Brazil and Europe.
Alvaro Torres, CEO and Director of Khiron Life Sciences, commented: "With construction of our facility in Juan Lacaze, we are actively executing on our strategy to build a dominant position in Latin America and further expand our global reach.
Through its inclusion in the Mercosur trade bloc, Uruguay is poised to become a key source to supply the global medical cannabis industry. Our production in the country will target domestic use in Uruguay and export across one of the world's largest trading blocs, beginning with export to Brazil, home to 208 million people, and from there, we expect to move quickly across the bloc's trading countries in Latin America." Mercosur is officially the Southern Common Market and includes Argentina, Brazil, Paraguay and Uruguay.
Khiron has also begun pre-clinical studies in Uruguay as part of an initiative co-sponsored by the government of Uruguay using KHRN's strains. Identified as one of the most significant private-public medical cannabis studies underway in Latin America, the research program has received matching government funding for its medical innovation.
One of the things you have to admire about KHRN is how they carry out their projects in a careful and methodical fashion. A binding letter of agreement to acquire NettaGrowth for $13.7 million was first announced January 25, 2019. At the time, it was pointed out that Uruguay was a member of Mercosur and this would provide access to Southern Brazil. It was also announced that upon completion of the acquisition, Joseph Mimran will provide strategic counsel to KHRN on packaged goods and retail development in Latin America. Mimran is known for establishing brands such as Joe Fresh and Club Monaco. It was also announced that Michael Beck would join KHRN’s board of directors. All of this has now happened and construction of the facility has begun. So when Alvaro Torres says this facility will give them access to Brazil, the Mercosur trading partners in Latin America, I believed him seven months ago and I believe him now.
Although KHRN has been knocked down in the cannabis bear market, I now am adjusting my negative cannabis stock market outlook and starting to see reasons for cannabis stocks to rise. The bears took KHRN down in price and although it has made a recovery recently, I suggest it still has a long way to go from here.