Although the Latin American cannabis market has not been the growth driver that many companies and analysts expected, the size of the market from a population standpoint leaves us excited about the potential of the industry.
Khiron Life Sciences Corp. (TSXV: KHRN) (OTCQX: KHRNF) (Frankfurt: A2JMZC), a vertically integrated cannabis company that is focused on the cannabis market in Latin America and Europe, is a leading player in a few emerging markets.
Last week, Khiron issued a corporate update on global medical cannabis operations and reported to be seeing accelerating sales growth in Colombia. On top of this, the company has started to sell medical cannabis in Peru, and this is a market that we are closely following.
As of October 31st, Khiron had filled more than 4,600 medical cannabis prescriptions (1,300+ in October) and is recording impressive growth on a month-over-month basis. From July to October, the company has recorded more than 130% growth form a prescription rate standpoint and this is a trend that we are bullish on.
Although Khiron’s clinic business was impacted by the COVID pandemic, monthly patient consultations in October was significantly higher than it was before the pandemic. We find this growth to be significant and expect it to translate into continued revenue growth. With an increased focus on telehealth, the company was less impacted by the pandemic and we are favorable on how the management team responded to the crisis.
In Peru, more than 20 doctors are prescribing Khiron cannabis products and the numbers over the first four weeks was higher than Colombia. Over the next year, we expect the business to record strong growth and enter new markets. Although the market has responded favorably to the recent trend, we continue to consider it to be an undervalued opportunity.
PharmaCielo Ltd. (PCLO.V) (PCLOF) is also considered to be a leader in the Latin American market. When compared to Khiron, the company has not lived up to expectations and we have been on the sidelines with the opportunity.
In an effort to strengthen the balance sheet, PharmaCielo recently announced that it has increased the size of its previously announced private placement offering from $5.0 million to $10.0 million. We will monitor how the management team is able to use the capital to grow the business and will keep an eye on how the story advances from here.
Blueberries Medical (BBM.CN) (BBRRF) is an Latin American cannabis company that is flying under the radar. From a valuation standpoint, the business is worth a fraction of what Khrion and PharmaCielo are worth and we have been closely following the opportunity. Although the last few months have been quiet for Blueberries, we believe the management team is focused on cutting costs and increasing revenues.
If you are interested in learning more about the Latin American cannabis market, please send an email to email@example.com with the subject “Latin American cannabis companies” to be added to our distribution list.