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A subsidiary of Australian cannabis company Creso Pharma (ASX: CPH) has been granted a pivotal licence to grow medicinal cannabis in Colombia.
Creso, through Kunna Canada, has been granted a licence to cultivate medicinal cannabis in Colombia, following the receipt of licenses required to produce, manufacture, market and export cannabis derivatives and products using extracts in 2017.
Creso CEO and co-founder Halperin Wernli says the opportunities arising out of the Colombian project will allow for massive expansion for the company.
"We are really excited about the opportunity that the acquisition of Kunna and its licence to cultivate provides us," says Wernly.
"We know from our pharmaceutical experience that a foothold in Colombia provides a great springboard into the rest of Latin America. In addition, from a product perspective, Colombia offers varied genetics and the ability to grow high quality products at a low cost."
Creso Pharma became the first Australian-listed cannabis company with direct exposure to the Colombian market after it acquired Kunna Canada and its wholly owned subsidiary Kunna S.A.S. in December 2017. Creso acquired Kunna Canada for $9.35 million in shares.
By 2019, analysts predict that the Colombian market alone will be exporting more than 40.5 tonnes of medicinal cannabis oil.
READ: The Cannabis Index: A complete guide to cannabis stocks on the ASX
The jump into the Colombian market is highly advantageous from a cultivating perspective, considering the country's equatorial location and ideal microclimates for growing cannabis.
Kunna S.A.S. aims to develop phytotherapeutic products with a view to treating seizures, chronic pain, cancer, epilepsy, and multiple sclerosis.
Additionally, Creso says Colombia is a significantly cost-effective place to grow cannabis. In Colombia, cost of goods sold for a gram of cannabis flower equivalent can be as low as just $0.35 cents vs $1.57 in Canada, and trimming rate per gram is $0.10 vs $0.50 in Canada.
Kunna has already selected a parcel of land suitable for cultivating medicinal cannabis, and will soon begin a seed certification project followed by a full genetic and fertilisation project to obtain the optimal scalable crop.
Creso isn't the only listed cannabis company kicking goals in the Latin American region, with AusCann recently completing its second harvest in Chile.
The Latin American market for medicinal cannabis projects is huge, with 68 million people suffering from conditions potentially suitable for treatment with medicinal cannabis according to Creso.
Creso says Colombia could supply 44 per cent of the global demand for medicinal cannabis in 2018 after the country's Drug Control Fund authorised the harvest of 40.5 tonnes for export-only purposes.
Shares in Creso Pharma will open on Tuesday morning at $0.72 per share.
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Business News Australia
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