Uruguay was the world’s first country to fully legalize cannabis use in 2013; since then, other nations in the region have begun to loosen their own cannabis laws, causing players in the public cannabis space to take note.

For one company, PharmaCielo (TSXV:PCLO,OTC Pink:PHCEF), the marijuana market in Latin America has proven to be a lucrative arena, despite its youth.

The Investing News Network (INN) spoke to the company’s chief corporate officer, David Gordon, about PharmaCielo’s moves in the nascent Latin American market following the legalization of public cannabis consumption, and its plans to move beyond the region.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

Gordon said the pet care space remains an undiscovered realm for cannabidiol (CBD) and pointed to pet care as one of the next trends in the marijuana industry.

“Whether it’s (at) the industrial-level livestock or family pets, it’s an area that’s taken seriously. And as we explore it, it hasn’t been a primary focus for anybody at this stage,” Gordon told INN. “There’s very little done in the area, so we see a legitimate opportunity there for substantial growth.”

In August, PharmaCielo, which operates a crucial subsidiary in Colombia, signed a sales agreement with Uruguay-based animal health company Laboratorios Adler.

As a part of the agreement, PharmaCielo is subcontracting the production of anibidiol, a branded complementary feed for pets that contains CBD, to Creso Pharma (ASX:CPH). PharmaCielo acquired the Australia-based cannabis firm in June.

The four and a half year deal states that PharmaCielo will ship CBD extracts and oils as well as veterinary products to Adler, which will then be distributed in Uruguay, Paraguay, Bolivia and Southern Brazil.

PharmaCielo hasn’t been the only cannabis company to direct its focus toward furry companions.

Earlier this year, Charlotte’s Web Holdings (TSX:CWEB,OTCQX:CWBHF), a US-based hemp-derived CBD producer, launched CBD-infused canine products for its pet line.

Next Green Wave Holdings (CSE:NGW,OTCQX:NXGWF) has also stepped into the CBD pet care space by adding the CBD-infused Loki Love Biscuits to its portfolio.

Another player, BC-based hemp pet care company True Leaf Brands (CSE:MJ), has signed a memorandum of understanding with Eagle Vet, an international pet care distributor, to introduce its products into the South Korean market.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

Colombia offers marijuana companies convenient weather for production

Apart from a growing market for pet care, Colombia offers other benefits to cannabis firms. The country has increasingly become the darling of the cannabis industry, due in part to its ideal growing conditions.

Colombia’s tropical climate is home to a hearty agricultural sector that globally exports coffee, bananas, flowers and now marijuana.

Unlike their counterparts in North America and Europe, growers in Colombia aren’t hindered by having to maintain expensive, climate-controlled greenhouses, and labor costs are also much lower.

Other big names in the cannabis space, like Canopy Growth (NYSE:CGC,TSX:WEED), have moved into Colombia to take advantage of the perfect weather conditions.

Last year, the Ontario-based marijuana giant announced the opening of its Latin American subsidiary, Canopy LATAM. Through Canopy LATAM, the company acquired Spectrum Cannabis Colombia, currently headquartered in the state of Huila. The site boasts a 126 hectare farm and is licensed for 13.5 million square feet of cannabis production.

Gordon said PharmaCielo’s operations in the South American country are consistent and have resulted in more than five cultivation harvests a year.

Colombia’s medical cannabis space has been booming since legalization. According to an article in Biz Latin Hub, the country intends to produce 40.5 tonnes of cannabis per year from this year on and has set up licensing to support the legal framework for cannabis companies.

Gordon emphasized, though, that Colombia’s cannabis space is still in the early stages.

“The rules and rights around retail distribution within Colombia are still being clarified,” the executive told INN. He added there is a lack of clarity when it comes to product labeling and description.

“It is far from a mature marketplace, and there’s a lot of pressure on (the) government down there to address the regulatory side effects to clarify the marketplace requirements.”


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

Colombian market sees tumultuous path to current state of operations

It’s been roughly four years since Colombia legalized cannabis for medical and scientific use back in 2015. Since then, there have been further moves to define rules around the drug.

In June, Colombia’s Constitutional Court overruled a ban on the public consumption of marijuana, which originally served as part of President Iván Duque’s 2017 Police Code.

In an interview with Forbes, Sandra Carrillo, a Colombian doctor and medical cannabis expert, called the law “badly written.”

The law was criticized for being unduly strict, holding public consumption of beer and selling cocaine near schools in the same regard.

“The government needs to think through and create a fair and reasonable regulatory regime, instead of repeating the mistakes of the past,” said Carrillo.

While Duque has been vocal about his anti-cannabis stance, allowing people to consume cannabis freely may be the next step to full legalization.

Colombian firm looks ahead to expanding neighbor markets

PharmaCielo became the first medicinal cannabis company to export cannabis isolates from Colombia to Switzerland, the company said in August, after shipping CBD to the Swiss headquarters of Creso Pharma.

“We established our operations in Latin America, in Colombia specifically, with a view to the global marketplace,” Gordon said.

Gordon told INN that now the company has figured out the various requirements needed to export from Colombia, a second shipment is set to be exported to Switzerland in the coming months.

When asked about other plans moving forward, he mentioned that PharmaCielo has pending announcements about its work in Colombia’s domestic cannabis market as well as Canada’s market.

Switzerland isn’t the only European market PharmaCielo is pursuing, according to Gordon. The executive said his company is in discussions with players in the UK, Germany and Italy.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Danielle Edwards, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: Next Green Wave is a client of the Investing News Network. This article is not paid-for content. 

The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!
Cannabis Market Update: Q3 2020 in Review

Click here to read the previous cannabis update.

During the first few months of investment time in 2021, cannabis faced some volatility alongside optimism about federal changes in the most important market for the drug.

The cannabis business found its stride during Q1 thanks to policy change signals and consolidation.

To find out more, the Investing News Network (INN) asked experts about progress in the market during the first major period of the new year, and which developments investors should watch out for.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

Cannabis market update: New York and US potential boost operations

New York state’s legalization of recreational cannabis was a huge Q1 announcement that added pressure to the federal government when it comes to cannabis policy, said George Mancheril, co-founder and CEO of Bespoke Financial, a debt financing business with a particular focus on servicing cannabis businesses.

“It’s going to add to the chorus of voices in the federal scene to basically move sooner rather than later,” he explained to INN.

Following the US election in 2020, the momentum for cannabis businesses went on the upswing, as did company valuations, with the idea of expansion at the heart of it all, according to Mancheril.

Before starting Bespoke Financial, Mancheril learned from traditional investment banks, where he worked on lending, fixed income and debt markets with Goldman Sachs (NYSE:GS) and Guggenheim Partners.

Nawan Butt, portfolio manager with Purpose Investments, agrees with Mancheril. The financial expert told INN the ongoing legalization process seen in the US market is leading to expansion.

“It’s becoming more of a national move, then small pockets of proliferation. That’s very exciting about cannabis right now,” said Butt, who co-manages the Purpose Marijuana Opportunities Fund (NEO:MJJ).

This proliferation effect is causing a change in valuations and enthusiasm for US-based operations. Mancheril told INN that by the end of Q1, multi-state operators (MSOs) had raised approximately US$3.3 billion.

The cannabis lender said he sees the industry as having grown from the woes of 2019; it is now seeing a return to form by way of the excitement for an ongoing opening process in the US.

The expert explained that there is likely to be a windfall of capital in the wake of major federal changes for cannabis policy, although the timeline for these changes is becoming increasingly hard to predict.

Leading up to that capital influx, Mancheril said he wants to see operators really drill down on the value of desired assets and whether they make sense.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

“What I’d hope is that we continue to see bullish sentiment, but with some measure of responsibility, and let’s not just get over ahead of ourselves,” Mancheril told INN. “The idea is let’s minimize the volatility and continue growing responsibly.”

As far as struggles go, Butt explained that the cannabis industry has cemented itself as a growth-type sector, and as such there are macro environment pressures affecting the way these assets operate.

“We’ve seen this preference for cash flows at growth in the current or in the near future, rather than in the far future, and that’s what we’re seeing as far as valuations go in the broad market,” Butt said.

Cannabis market update: Volatility continues to rule as industry foundations build

Despite the industry’s current potential and the growing pains it has gone through as a whole in both the US and Canada, volatility remains a key factor in the cannabis investment scene.

Butt explained that the current shareholder base, which is dominated by hedge funds and retail investors, still lacks enough institutional support to avoid the day-to-day volatility cannabis has come to be known for.

These two investor groups, Butt said, can be easily spooked and excited by the news of the day when it comes to their investments.

“A lot of these institutions’ strategies are not about short-term profits, but they’re about long-term sustainability of the businesses themselves,” Butt said.

“That’s why you see a lot of volatility in the space, and that’s essentially what we’ve seen over the past, I’d say, three to two months as well,” he added.

That means investors shouldn’t expect an end to volatility anytime soon.

“It’s not about whether we continue to expect volatility, because we do,” Butt said. “We really think that the volatility will be taken out when the shareholder base becomes more institutional, but it’s really about understanding why there is volatility in the first place.”

Cannabis market update: Canadians talk up US business potential, but questions remain

A surge of mergers and acquisitions has taken over the Canadian cannabis sector recently as more producers see potential in America.

One of the biggest announcements in this regard came when Organigram Holdings (NASDAQ:OGI,TSX:OGI) secured a C$221 million investment deal from British American Tobacco (NYSE:BTI,LSE:BATS).

Using the funds, the two will work in tandem to develop new branded products designed to work on the international stage, including in the US. Organigram CEO Greg Engel previously told INN that the US represents a critical opportunity for Canadian companies, but the entry point isn’t as clean as it could be at the moment.


Cannabis - Will The Fortune 500 Join The Party?

Our Exclusive FREE Report Contains Information You NEED To Know About Cannabis Stock Investing!

While the long-term potential may be exciting for investors, Butt told INN he’s still unsure how the approach will work for Canadian companies.

The Purpose Investments expert said there will be plenty of space for the biggest Canadian names to pursue US market entries, beyond the initial hemp-derived CBD moves some operators have mde, since the US represents the biggest market in the world.

“But there’s just way too many unknowns right now to say exactly what that participation is going to look like, or when that participation will happen,” he said.

“What we do know is that currently the US MSOs are in a wonderful sort of position to expand on their market leadership that they have. And it will be tough for Canadians to come in and compete with them,” Butt said.

Canadian players still retain the upper hand at times in terms of valuation, which is confusing for both Butt and Dan Ahrens, chief operating officer and portfolio manager at AdvisorShares.

“The performance in quarterly earnings of US companies has been rather spectacular. They’ve knocked it out of the park in most instances,” Ahrens told INN.

Butt praised the recent performance reports from MSOs across the board, pointing to year-over-year growth lines and projections for continued positive performance.

In his view, share prices still don’t reflect company value. “Those are really being discounted at this point,” Butt told INN.

“We’ve seen the Canadian licensed producers be really hot stock performance-wise, outpacing the US (MSOs), and I’ll say it’s rather nonsensical to me,” said Ahrens, who oversees the AdvisorShares Pure Cannabis ETF (ARCA:YOLO) and the recently launched AdvisorShares Pure US Cannabis ETF (ARCA:MSOS).

Cannabis market update: Investor takeaway

The cannabis investment proposition finds itself at an interesting moment in time, as the entire sector eagerly awaits confirmation in the US at the federal level.

While for the Canadians waiting on the sidelines, this development may feel like a major necessity to address current financial struggles, for US-based operators, the heat around the corner could represent an increase to their already thriving operations.

Keep reading... Show less

 Trulieve Cannabis Corp. (“Trulieve” or the “Company”) (CSE: TRUL) (OTC: TCNNF), a leading and top-performing cannabis company in the United States will release its first quarter 2021 financial results on Thursday, May 13, 2021 before markets open. Following the earnings release, management will host a conference call at 8:30 AM Eastern Time to review the financial results.

All interested parties can join the conference call by dialing 1-888-231-8191 or 1-647-427-7450, conference ID: 4880609. Please dial in 15 minutes prior to the call to secure a line. The conference call will be archived for replay until May 20, 2021 . To access the archived conference call, please dial 1-855-859-2056 and enter the encore code 4880609.

Keep reading... Show less

Appointment of Dr. Kelmendi, Assistant Professor of Psychiatry at Yale University and co-founder of the Yale Psychedelic Science Group, brings another experienced medical professional to Lobe’s advisory team.

 Lobe Sciences Ltd. (CSE: LOBE) (OTC Pink: GTSIF) (“Lobe” or the “Company”) is pleased to announce the appointment of Benjamin Kelmendi, MD, Assistant Professor of Psychiatry at Yale University School of Medicine, to its Scientific Advisory Board.

Keep reading... Show less

Ayurcann Holdings Corp. ( CSE: AYUR ) (the “ Company ” or ” Ayurcann “), a Canadian extraction company specializing in the processing of cannabis and hemp for the production of oils and various derivative products, is pleased to unveil further details of its Phase 2 expansion plans.

Ayurcann has commenced trading on the Canadian Securities Exchange (” CSE “) on April 8, 2021 and subsequently announced a private placement of up to $500,000 (” Financing “), as per the Company’s press release dated April 12, 2021. The proceeds of the Financing are intended to be used to further pursue Phase 2 of the expansion of the production capacity of the Company’s Pickering facility.

Keep reading... Show less