Avicanna Unveils Plans for Colombian Extraction Facility

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Ontario-based cannabis producer Avicanna Inc. has announced plans to build an 11,000 sq. ft. extraction facility in the Colombian free trade zone.

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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The opinions provided in this article are those of the author and do not constitute investment advice. Readers should assume that the author and/or employees of Capital 10X hold positions in the company or companies mentioned in the article. For more information, please see our Content Disclaimer.

Martin Green
Martin Green is an experienced journalist with a strong focus on the cannabis, alcohol, and gambling industries. He is particularly interested in the political issues affecting the global marijuana trade, and he has a keen focus on regulation changes and legal topics. He holds a BA English Literature, MA Creative Writing and a National Qualification in Journalism diploma. He has worked in journalism since 2009 and written for a broad range of newspapers, business titles and magazines, including The Sun, The Metro, The Journal, Livestrong, Drinks Retailing News, Harpers, Sportsbook Review, Vital Football, Essex Live and Surrey Live. Address: 682 Indian Road, Toronto, Ontario, M6P 2C9. Phone: 416-721-8257.
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