PharmaCielo is coming to the TSX Venture
The TSX Venture Exchange will soon add the new ticker symbol PCLO when PharmaCielo begins trading on or around January 18, 2019. PharmaCielo Ltd. is the Canadian parent company of the Colombian cultivator PharmaCielo Colombia Holdings S.A.S., Colombia’s premier cultivator and producer of medicinal-grade cannabis oil. The Colombian company has completed a successful build-out of its new cultivation and processing infrastructure to transition to commercial production and sales in 2019.
PharmaCielo is already cultivating in approximately 570,000 square feet of open-air greenhouse space, with a plan to grow to over 2 million square feet by the end of the 2019 calendar year. The company has plenty of room to grow, given that their total current cultivation capacity stands at around 15 million square feet: 1.3 million square feet comprising a plant nursery and propagation center, 0.4 million square feet of PharmaCielo-owned open-air greenhouse space and 13.3 million square feet of open-air greenhouse space to be filled by contract growers.
A massive expansion
Co-founders Anthony Wile and Federico Cock-Correa state that the massive expansion is being undertaken to keep up with greatly increased demand for their medicinal-grade cannabis oil. In preparation for the TSXV listing, Wile issued a corporate update press release: “When we founded PharmaCielo several years ago, we envisioned an organization that could leverage Colombia's natural advantages to become a leading global supplier of cannabis products to equally benefit end users, shareholders and the people of Colombia." Licensed Colombian producers are required to construct industrial cultivation facilities within or adjacent to indigenous communities, and are also obligated to source at least 10 percent of production from those communities.
Colombia has seen a huge investment influx from Canadian cannabis companies, in large part due to efforts by the country’s previous president Juan Manuel Santos Calderón who held the office for nearly a decade. Calderon was also the sole recipient of the 2016 Nobel Peace Prize. The ideal climate of Rionegro’s fertile soil and 12 hours of sunshine per day every day allows for both outdoor cultivation and year-round harvests. Colombia also has a very skilled cultivation workforce; many generations have worked in the ornamental flower industry, as Colombia is the second largest producer of flowers in the world. Cannabis, after all, is just another flower.
Colombia is one of South America’s largest economies, and the country’s criminal cartels have been growing cannabis for decades. Calderon began to put the infrastructure in place, hoping that farmers would leave the cartels and put their skills to use for the legal market. PharmaCielo COO Marcelo de Siqueira explained it by saying, “We’re taking all the techniques that have been developed in the last 40 years in the cut-flower business in Colombia and adapting cannabis to it.”
Greenhouse expansion is only one of the recent changes PharmaCielo has made in its preparation for a public TSX listing. Wile, who has been serving as interim CEO, has stepped down from that role and from the board to return to his CEO role at Colombian private equity firm Grupo Jaque Ltd. Although Wile will continue in an advisory role, David Attard, who has been on the board since 2015, has been appointed as the new CEO.
The company currently produces both THC- and CBD-dominant cannabis oil extracts and is the largest Colombian cultivator of both categories.
The Colombian Ministry of Agriculture recently awarded the company multiple registration receipts for several cannabis strains, meaning that PharmaCielo possesses unrestricted ownership of the unique plant genetics for mass cultivation and oil extraction. In response, the company added a 45,000 seedling planting of THC-dominant cannabis to its 200,000 CBD-dominant plants already in cultivation.
Interestingly, PharmaCielo just received a 500-year-old ancestral cannabis strain for its exclusive use. The strain was granted to the company by the Arhuaco indigenous people and will be cultivated in the Arhuaco ancestral territory of the Sierra Nevada mountains. The seeds were granted to Anthony Wile during a ceremony, with Wile speaking about being grateful to the Arhuaco for placing their trust in his company to “carry a strain of great cultural importance to the wider population of Colombia and other global markets."
Similarly, the Arhuaco leader spoke about the benefit of the partnership to his people, saying that PharmaCielo “has created the first alliances between private companies and social organizations in areas that have been historically affected by violence and illicit crops."
The company is expanding to a 2,300 square meter oil processing facility in anticipation of a substantial increase in demand for PharmaCielo’s product line. The facility should be operational before the end of 2019, and part of it will serve as space for a new product innovation and development center. Indeed, PharmaCielo is looking to the future, and poising itself to be a supplier of cannabinoid input products to some of the world’s largest end-product cannabis companies.
While these expansion efforts may seem like large undertakings for such a small company, the company is awash in $30 million in cash. Additionally, PharmaCielo has proven its worth as a reliable supply chain partner by providing large volume and consistently high-quality oils to their current supply chain partners.
Attard reports that the company is focused on consumer product development and innovation, and “is engaged in advanced discussions to enter target international jurisdictions.” Additionally, PharmaCielo is reported to be in talks with several large organizations, including those in the pharmaceutical, consumer beverage and tobacco sectors. This year, the company will focus on finalizing agreements with both Colombian and international distributors and end-product manufacturers, and will also turn their attention to cannabis oil product sales in key markets.
Teaming with the oncology practitioner network Centro Oncológico de Antioquia which treats five million patients, PharmaCielo will co-locate clinics in established COA locations to create a pharmacy presence to provide cannabinoid-based treatments to both practitioners and patients. The first clinic is expected to open in early 2019. PharmaCielo also intends to acquire UBIQUO, a patient and e-clinic platform with 85,000 patients. UBIQUO is currently centralized in Medellin, but expansion is expected across seven other Colombian areas.
Wholesale and retail partnerships are also in play as the company is in “advanced discussions” with several leading Columbian companies in the health and wellness space. While the company is currently hush-hush about who those partners are, PharmaCielo has hinted at an information release regarding one such major partner early in 2019. PharmaCielo is also finalizing contracts with targeted health and wellness product distributors in Europe, North America, and Central America.