Khiron using Latin American business to launch into Europe (TSXV: KHRN)
Khiron Life Sciences has taken the first step in their strategy to use a base of business in Latin and South America as a launching pad into Europe and perhaps a global market. This past week, KHRN announced signing a non-binding letter of agreement to acquire 100% of Canapalife and 100% of the economic interest in Campodoro. Canapalife is a prominent hemp product company based in Italy with licenses for the cultivation, research, production and marketing of hemp–based products. Canapalife operates a cultivation site in Padua, conducts research with local universities and has three registered consumer brands (see pictures). The purchase price is C $10.5 million in shares with a potential C$4.5 million earn-out subject to meeting revenue milestones. The purchase price is attractive as it represents a little more than one times expected 2020 revenue.
Italy is an under-appreciated economic unit and cannabis region in Europe. It is the 3rd largest economy in the Eurozone after Germany and France and the 8th largest in the world. Italy has a population of 60.5 million.
Italy is a founding member of the G7, the Eurozone and the Organization for Economic Co-operation and Development (OECD). Italy is considered a highly developed nation and has a large and competitive agricultural sector including the world’s largest wine production. Italy is the second largest cannabis market in Europe and cannabis consumption increased tenfold between 2013 and 2017. Italy legalized medical cannabis in 2013 and hemp with THC<0.2% is legal and grown across the country. It is an outstanding choice for Khiron to establish a toehold in the European area.
In a late breaking report, KHRN announced a Letter of Intent with Copservir Ltda, Colombia’s largest pharmacy chain with over 900 pharmacies across 200 cities and municipalities with sales of C$500 million per year.
While others “talk the talk,” Khiron continues to “walk the walk.” As long as the company keeps producing such positive results, investors will realize what is happening and shareholders will be rewarded even more.