When it comes to cultivating medicinal cannabis, Colombia has positioned itself as a world producer and exporter of the plant, one that has become increasingly legal around the world. With its prime growing conditions and 12 hours of daylight year round, it is far less expensive to produce cannabis in South America than in North America or Europe.
World-wide interest in medical marijuana is booming, and as a result, more cannabis companies are looking to Columbia where they can grow their plants easily, without the added costs of climate-controlled greenhouses.
The Colombian cannabis industry has had a large impact on operations at Toronto-listed PharmaCielo Ltd. (TSXV: PCLO), a leading supplier of naturally grown and processed medicinal-grade cannabis oil and related products. Company leaders describe Colombia as one of the most cost-competitive and environmentally friendly nations on earth for cannabis cultivation.
To continue its production of high-quality Colombian cannabis extracts, PharmaCielo recently announced that it will acquire Australian company Creso Pharma Ltd., a global medicinal cannabis company that focuses on developing, registering, and commercializing innovative cannabis and hemp-derived products, for an aggregate price of A$122 million.
The acquisition will help PharmaCielo expand into higher-margin, branded product sales faster. Additionally, the merged entity will hold licenced cultivation and processing facilities in both Colombia and Canada.
David Attard, CEO of PharmaCielo, spoke about the benefits of the deal in a statement from the company. Attard explained that PharmaCielo’s acquisition of Creso Pharma creates a company that will be a powerhouse on the global medicinal cannabis market. He mentioned that the acquisition expands the company’s global footprint and allows them to immediately bring high-quality Colombian cannabis oil products to market.
Following the close of the acquisition deal, the combined company will benefit from shared synergies and assets that include the following:
- Creso Pharma’s world-class team, which has extensive experience in the pharma, food, and cannabis industries.
- Creso Pharma has commercialized four proprietary branded products in less than two years, including CBD-based products for human and animal health.
- Four additional products are to be commercialized in 2019 by Creso Pharma, adding both additional proprietary formulations and delivery technologies to the pipeline.
- Creso Pharma’s sales in 13 countries including Australia, New Zealand, Brazil, Switzerland, Germany, France, the Netherlands, and the United Kingdom expands upon PharmaCielo’s networks in South America, Mexico, and Italy.
- The expansion of proprietary strains registered for commercial cultivation through combination of Israeli R&D cultivation facility with Colombia R&D cultivation facility.
Dr. Miri Halperin Wernli, the co-founder and CEO of Creso Pharma, also spoke about the benefits of the acquisition deal. In a statement from the company, Wernli said:
“The quality and scale of PharmaCielo’s cultivation and oil extraction operations in Colombia complements our focus on meeting global demand for the highest quality CBD- and THC-based therapeutic, nutraceutical and animal health products through increased access to the necessary quality and volume of oil production. This arrangement with PharmaCielo is an incredible opportunity for Creso Pharma shareholders to benefit from being part of a best-in-class and well-capitalized global medicinal cannabis company.”
On June 21, PharmaCielo also announced that it was trading on OTC (over-the-counter) markets under the symbol “PHCEF.” In a statement from the company, Attard discussed how the acquisition of Creso Pharma had led to increased attention and interest in PharmaCielo’s stock. “Trading on the OTC will increase access for U.S. and international investors, providing greater liquidity and better access to capital. As we move forward building a global medicinal cannabis company, we will work to provide easy access and liquidity for investors in all jurisdictions,” Attard said.