Khiron Life Sciences Corp (CVE:KHRN) (OTCMKTS:KHRNF) (FRA:4KH) positioning in the Colombian medical cannabis market received a major boost on Monday, as the company appeared poised to lock down the nation’s biggest supply chain. Enthusiasm bubbled over into the common, where KHRN jumped higher 17.52% by market close.
Monday’s news came via early morning press release, in which Khiron Life Sciences announced it had signed a Letter of Intent with Copservir Ltda.—Colombia’s largest pharmacy chain—to distribute the company’s medical cannabis products across the country. Copservir operates over 900 stores across 200 cities and municipalities, with brick and mortar presence representing 75% of its C$500 million in annualized sales. Compsevir’s online presence comprises the majority of the remaining revenue pie—and it’s growing at over 20% on an annualized basis. Both companies will work towards establishing definite commercial and distribution agreements to begin sales in 2H 2019. No financial terms were released.
Upon completion of the agreement, Khiron will be well-positioned to serve Colombia’s population base of almost 50 million people (5 million potential medical patients – Source: Quintiles IMS). Having access to the biggest distribution channel is just one component of the strategy. Along with their meticulous focus on cannabis education and recent acquisition of the Latin American Institute of Neurology and the Nervous System (ILANS), Khiron has built the most robust pipeline to drive medical patient counts within the nation. The ILANS network represents 100,000 patients in Colombia, with approximately C$10.5 Million in gross revenue and C$1.8 Million of EBITDA—according to 2017 audited financial statements.
Of course, macro messaging and authority is fortified by having the preeminent LATAM medical cannabis spokesperson, Vincente Fox, in its corner.
With Khiron Life Sciences establishing their patient education-clinician-distribution blueprint in Colombia, we await to see whether this model is readily exportable to other LATAM nations. Khiron has already extended an agreement with Farmalisto of Mexico to market and distribute its Kuida CBD cosmeceutical brand, so there’s little reason to believe it can’t. Either way, the end goal is to continue penetrating each country-specific supply chain (where applicable), and establish dominance in the region’s burgeoning cosmeceutical and prescription markets.
Midas Letter will have additional coverage as events warrant.
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