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Blueberries Medical Corp. Is A Fully Licensed Colombian Cannabis Play To Watch

Feb 7, 2019 • 12:07 PM GMT+0000
Blueberries Medical Corp..png
6 MIN READ  •  By Michael Berger
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Blueberries Medical Corp (CSE: BBM) has attractive leverage to the Colombian cannabis market, which has recently become a major area of interest for leading cannabis companies. The reason why companies are attracted to that emerging cannabis market is simple; the economics associated with cultivating cannabis are extremely attractive and producers can achieve very low costs at scale.

This provides Colombian cannabis producers with a strategic advantage, where they can cultivate cannabis for a fraction of the cost of Canadian cannabis producers. This represents a significant opportunity and we believe that Blueberries Medical Corp is positioned to be a leader in this emerging market.

During the last year, we have been closely monitoring the Latin American cannabis opportunity with an emphasis on the cannabis market in Colombia. There are several reasons why we are favorable on Blueberries Medical Corpand we want to highlight these reasons and provide an update on this new opportunity.

  1. The company is led by a management team that has a proven track record of success and we are favorable on their ability to execute and create value for shareholders
  2. Blueberries has secured a strategic relationship with a leading European firm to distribute and sell the company’s product
  3. The company is fully licensed to cultivate, extract, process and commercialize cannabis derivatives in Colombia and abroad
  4. Blueberries has secured a large land package and has the option to significantly expand and scale efficiently through contract growers
  5. The company already has a production facility that has existing infrastructure including greenhouses and an irrigation system

A Fully Licensed Colombian Growth Opportunity

When it comes to looking at the Colombian cannabis opportunity, investors should be focusing on companies that are fully licensed and well positioned to capitalize on this burgeoning market.

Blueberries Medical Corp is fully licensed, and this is an important aspect of the story. The company is a fully licensed producer of medical cannabis flower and oil products in Colombia and we are favorable on the growth prospects associated with this.

Demand for cannabis oils, especially high cannabidiol (CBD) oil, continues to increase and this is a trend we expect to continue as researchers learn more about the therapeutic value cannabinoids provide. Blueberries Medical Corpis highly levered to this opportunity and has been granted a license to cultivate tetrahydrocannabinol (THC) and CBD.

We find the cannabis oil market to represent one of the most attractive growth opportunities and we are favorable on Blueberries’ leverage to this market. The company is in the middle of a major expansion and once this is completed, it will be one of the largest cannabis producers in the Colombia.

In the Middle of a Massive Expansion

The current facility, Guatavita Farm, is located in the Bogota Savannah, which is the major production center of cut flowers in Colombia. Blueberries Medical Corp has secured 3 hectares of land for the first facility and plans to build-out more than half of this property (1.8 hectares) in 2019. This facility is strategically located in one of the safest regions of Colombia and is in an area that has scalable cultivation infrastructure.

Blueberries Medical Corp is focused on constructing state-of-the-art facilities that are Good Manufacturing Practices (GMP) compliant and we are favorable on this aspect of the story. Facilities that are constructed to these stringent standards can export cannabis products to other international markets and we are bullish on the growth prospects associated with these markets.

Although the company has been laser focused on the opportunity at the Guatavita Farm, it has also focused on increasing its production capacity and is working on constructing additional facilities. Blueberries has significant catalysts for growth, and we think each of these facilities will prove to be a major value driver for the company.

Zipaquira Farm represents a significant opportunity for BlueberriesMedical Corp, and we are monitoring how the team executes on this. This is a much larger land package and provides the company with 15 hectares. The company has the ability to increase the size of this land package to 40 hectares and this would be a massive opportunity.

Blueberries expects to expand to approximately 9 hectares in 2019 and 22 hectares by 2022. The farm has water resources for irrigation and plans to cultivate natural cannabis. Blueberries has a goal of being fully cultivated by the end of 2022 and this represents a significant growth project.

These two farms provide Blueberries Medical with massive scale and will be able to generate approx. $119 million a year. The company has upside from here and has developed a cultivation model that will be scaled by including third party contract growers to increase the production available without the need for additional future capital investment.

With the capacity that is owned and leased by Blueberries Medical (plus small producers and indigenous groups), it can cultivate approx. 209,000 kilograms of cannabis per year. When you include the contract growers, the company will be able to produce an additional 220,000 kilograms of cannabis per year. This is significant and we will monitor how the management team executes on this opportunity.

Laser Focused on the International Cannabis Opportunity

The international cannabis opportunity is significant, and Blueberries Medical has been laser focused on this. In order to develop an international distribution network, the company is making progress with some potential partners located in countries where there are legaframeworks for medicinal cannabis already in place.

When it comes to strategic relationships, the company has done a great job of executing and is well positioned to capitalize on the European opportunity. Blueberries Medical has secured MADRE TERRA as its strategic partner for the distribution and sale of cannabis products in Europe.

These relationships are significant and improve the company’s value proposition. Demand for cannabis products (especially CBD) in Europe has been increasing rapidly and this is a trend that we expect to continue for years to come. With the focus on constructing GMP compliant facilities, this opportunity is something that needs to be monitored as it can prove to be a major value driver for Blueberries.

Blueberries has also been laser focused on expanding its reach in Latin America and is targeting countries including Argentina, and Mexico. The company is also looking at the opportunities in Italy and Australia and this is something we are monitoring closely. 

A Company that Investors need to be Watching

When it comes to distribution, Blueberries Medical is well positioned in the Colombian market and we are favorable on this. The company entered into a letter of intent with El Manantial, an alternative medicine clinic with approx. 7,000 patients and this will be a strategic relationship.  The number of patients is expected to increase to more than 50,000 over a 36-month period as the company rolls out to four new departments.

Blueberries Medical is focused on expanding its product line and has developed its first finished product (prototype) manufactured with imported cannabis oil extract. In 2019, the company expects to launch new products and we are bullish on this.

The Latin American and international opportunity is a very exciting part of the cannabis industry and Blueberries Medical is a company worth watching. To learn more about this burgeoning opportunity, please contact support@technical420.com.

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Authored By

Michael Berger

Michael Berger is Managing Partner of StoneBridge Partners, LLC and Founder of Technical420.com. Prior to entering the cannabis industry, Michael was an Equity Research Analyst at Raymond James Financial covering the Energy Sector. Michael has been featured in publications such as The Street, Bloomberg, US Money News, and hosts various cannabis events across North America.

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