This South American Cannabis Leader Is Surely Worth Taking A Look At……..

Earlier this month, Khiron Life Sciences Corp. (TSX Venture: KHRN) (OTCQX: KHRNF) (Frankfurt: A2JMZC) plunged lower after reporting fourth quarter financial results. 

We were surprised by the market’s negative response to the results and decided to further analyze the business after the move lower. Although the Latin American cannabis company has been capitalizing on the European Union (EU) and the United Kingdom (UK), the pace of growth has been slower than expected and we will monitor how the story advances from here. 

At current levels, we believe that Khiron has a compelling valuation and a favorable risk-reward profile. When analyzing the company on several operation or valuation metrics, we believe the market is discounting the growth prospects that are associated with the business and want our readers to be aware of the following: 

1. At the end of the quarter, Germany and the UK accounted for more than 30% of Khiron’s medical cannabis sales
2. When compared to the prior year, Khiron recorded a more than 60% increase in revenue (total revenue was $12.8 million)
3. Khiron forecasted approx. $4.5 million of revenue for the current quarter
4. From a profitability standpoint, gross margins increased by almost 25% when compared to the prior year
5. The management team has been executing on a cost cutting strategy and recorded a more than 15% decrease in general and administrative (G&A) expenses when compared to the prior year 

During the last year, Khiron has been nothing short of an execution story and we are bullish on its leverage to the EU and Latin America. Over the next year, we expect the EU and the UK to account for a larger percentage of revenue and will monitor how the story advances in the back half of the year. 

If you are interested in learning more about Khiron Life Sciences, please email support@technical420.com with the subject “Khiron Life Sciences” to be added to our distribution list.

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Michael Berger is Managing Partner of StoneBridge Partners LLC. SBP continues to drive market awareness for leading firms in the cannabis industry throughout the U.S. and abroad.

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