In this edition of "Rising High," The Fly conducted an exclusive interview with Chris Naprawa, president of Khiron Life Sciences (KHRNF), a vertically-integrated cannabis company with core operations in Colombia. Here are some of the highlights:
LATIN AMERICA FOCUS: Khiron is an integrated medical cannabis company fully licensed in Colombia for the cultivation, production, domestic distribution, and international export of both THC and CBD medical cannabis. The company looks to address the Latin American market through a focused regional strategy and patient-oriented approach. "Khiron is set up to be the dominant player in Latin America for cannabis," Naprawa said. "We’re already in five countries, we’re well over 200 employees and we are set up to service the unmet needs of 620M people in Latin America." When asked about what differentiates the company from its peers, Naprawa said he believes it's the company's focus on packaged goods. "The vast majority of our competition is focused on low-cost cultivation for export to other markets whereas we’re focused on packaged good sales to the markets that we serve in Latin America," he said.
LEGALIZATION: When asked which country might follow Canada’s lead in legalization, the Khiron president said "the biggest news" in cannabis currently is Mexico. "Mexico has already announced their intention to legalize adult use and medical this year," he said. "That’s a market of 130M people and that is much bigger than certainly Canada or Uruguay." When asked about a timeline for U.S. legalization, Naprawa said he can speculate, but he does not really know. "The president on the campaign trail was very, very clear that he thought they should de-schedule cannabis and let the states decide. We’re very hopeful that that’s the case," he said. "Prohibition does not make any sense, I don’t know whose needs they’re servicing." Naprawa noted that polls show over 60% of Americans agree on some form of legalized cannabis. "There’s a foregone conclusion that prohibition will end at some point in time and whether it’s in this term or the next term, I don’t know," he said. "But the cat is out of the bag and we’re just hopeful with the rest of the market that the U.S. will follow the global trend to end prohibition."
EXPANSION: As more countries mull legal programs, Naprawa said Khiron will absolutely look to broaden its footprint "We’ve been expanding rapidly throughout our existence as a company and you can expect us to continue to expand," he said, adding the company is already in Colombia, Mexico, Chile, Peru and Uruguay. "I think you’ll see us in Brazil. Brazil will be the next big battleground," he said. "The other big country to worry about after that would be Argentina."
CHALLENGES: Naprawa said one of the biggest challenges facing the company is managing growth. "We’re growing very, very quickly and we’re hiring people very, very quickly. Managing that very rapid growth is always a challenge for any growth-oriented company," he said adding Khiron is handling that challenge by putting the right people in place. "If you can get great people, you can do great things," he said. As far as the industry goes, the Khiron president said he believes the space really needs to be customer centric. "Jeff Bezos has been saying for 20 years just focus on customers and we’re focused on customers," he said. "We’re not trying to do anything novel or anything new, we’re trying to listen to what the market is telling us and provide those services."
OPPORTUNITIES: When looking at opportunities in the space, Naprawa said Khiron believes the opportunity is in packaged goods and noted the company just announced a joint venture with Dixie Brands. The joint venture will introduce a full line of cannabis-infused products to the Latin American market and Dixie will also manufacture and distribute Khiron's Kuida brand of cannabidiol-based cosmeceuticals in the U.S. "I think the Canadian market for the most part has it all wrong," Naprawa said. "Focusing on dried flower and the very, very restrictive nature of the legislation against brands, against advertising, I don’t think that serves customers well at all." He added that mature cannabis markets like Colorado, California and others tend to be focused on packaged goods. "This market is not about brands and square feet and tonnage, that is not what the market is about," he said. "The market is about selling products that people actually want and that has very little to do with the plant itself."
INVESTOR INTEREST: Naprawa said investors interested in the industry should focus on what investors always focus on. "Predictable growth revenues, high margins and recurring revenues," he said. "That’s how companies in every sector are valued and that’s how companies in our sector should be valued."
OTHER CANNABIS STOCKS: Publicly-traded companies in the space include Aurora Cannabis (ACB), Aphria (APHA), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Cronos Group (CRON), General Cannabis (CANN), Canopy Growth (CGC), Tilray (TLRY), InnovativeIndustrial Properties (IIPR), India Globalization Capital (IGC), ICC International Cannabis (KNHBF), Biome Grow (ORTFD), MediPharm Labs (MLCPF), Indiva (NDVAF), OrganiGram (OGRMF), KushCo (KSHB), MedMen Enterprises (MMNFF), Elixinol Global (ELLXF), Planet 13 Holdings (PLNHF) and Wayland Group (MRRCF).
“Rising High" is The Fly's recurring series focused on cannabis stock news.
Khiron Life Sciences
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Aurora Cannabis
-0.23 (-3.18%)
APHA
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CV Sciences
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CNTTF
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Cronos Group
+0.12 (+0.59%)
Trees Corporation
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Canopy Growth
-0.73 (-1.59%)
Tilray
-1.53 (-1.98%)
Innovative Industrial Properties
-4.66 (-7.15%)
IGC Pharma
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ICC International Cannabis
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ORTFD
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Changed to MEDIF
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INDIVA
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Organigram
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KushCo Holdings
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MedMen
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Elixinol Global
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Planet 13 Holdings
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Wayland Group
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