Ontario-based cannabis producer Avicanna Inc.
The firm already has subsidiaries in Colombia that can produce up to 100,000 kg of cannabis on an annualized basis. The new facility will take that cannabis and turn it into finished products that are designed to be sold on international markets.
Avicanna will own 60% of the facility and local partner Inmobiliaria Bondue S.A.S. will own the remaining 40%. It has signed a commercial lease agreement for space to house the facility for an initial term of five years.
It is located in one of Colombia’s free trade zones, near Santa Marta, and this offers significant tax advantages.
It is also able to benefit from favourable growing conditions in South America and cheap labour, ensuring a bountiful supply of low-cost product. It owns two subsidiaries, Sativa Nativa S.A.S and Santa Marta Golden Hemp S.A.S., and the cannabis produced here will be turned into various products for international sale.
Chief executive Aras Azadian said the new facility will be “a fine example of Avicanna’s focus on efficiencies across all of its business units” and proof that its various businesses are efficient and competitive in a “commodifying global landscape”.
The new extraction facility should be operational in the second half of 2020. The company is in the process of expanding Sativa Nativa and Santa Marta Golden Hemp and those activities should be completed by the end of 2019.
Another JV with Sigma Analytical Services Inc. will offer fellow Colombian producers to test for pesticides, heavy metals, residual solvents, aflatoxins, microbial, genotyping, and cannabinoid and terpene profiling to see if they meet EU GMP, Health Canada, and U.S. Pharmacopeia standards.
Avicanna began trading on the TSX on July 18, when its share price was $6.23. It opened at $2.16 today after decreasing 65% since it first listed.
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