Chemesis (CSI.C), La Finca and the reconstruction of Colombia

Colombia is a coffee-producing powerhouse. “The best beans in the world,” according to the locals. Baristas–the true aficionados–tend to hover, searching foreign faces for agreement before ducking back behind the counter.

Those baristas may very well be right. The country’s very name evokes a reaction. Colombia. You can almost smell it.

But the country’s history is more than coffee beans. The subject of countless books and Netflix specials, Colombia’s prospects have been marred by violence for over five decades.

Erika Zalez comes from a long line of coffee growers and exporters, an industry now threatened by the effects of climate change.

As CEO of La Finca Interacviva-Arachna Med SAS, a subsidiary of Chemesis International (CSI.C), Zalez said she feels a different kind of agriculture may be the key to creating new jobs and soliciting foreign investment for the reconstruction of Colombia: cannabis.

“We were in a war for over 50 years in Colombia, and so there are many countries around the world interested in contributing to developing sustainable agriculture projects,” she said.

Though the FARC was Colombia’s anti-government militia, it was by no means the only one. Still, the country breathed a little easier with the group’s fighting force–estimated at 7,000 by the country’s army–now firmly out of action.

Zalez said the key to keeping peace will be putting Colombians to work: “We’re working with indigenous communities, affluent Colombian communities, poor farmers, rich agro-industrial businesses. They are all welcome.”

The civil war which lasted decades and displaced millions from their homes, was, in the end, effectively hamstrung, not by a successful coup nor overwhelming shell-fire from government forces, but a single bullet.

Farc leader Rodrigo Londono and Colombian president Juan Manuel Santos signed the peace accord on Nov. 24, 2016 with a pen made from a recycled shell-casing.

But the country is still recovering. The reconstruction effort is ongoing but the country needs jobs to maintain peace and, due to the conflict, Colombia has historically had “one of the highest unemployment rates” in Latin America, according to Colombia Reports.

La Finca has the noble intention of putting Colombians to work, not for Chemesis or La Finca, but for themselves. Given economic prosperity, the prospect of war may not appear as appealing.

The American war effort in World War II was supported by ordinary citizens collecting scrap metal for tanks. In an age of fragile ceasefires, it may be up to individual Colombians, like Zalez and her cohort at La Finca, to do the same, but for peace.

Putting Colombia to work

The company was founded in 2014 by husband and wife duo, Mario Francisco Sanchez and Yenny Jimenez.

Jimenez suffers from rheumatoid arthritis and cannabis has been a way for her to deal with the symptoms. Her husband, Sanchez, began cultivating it for his wife at a time when even medical cannabis was illegal in Colombia.

The couple became cannabis activists and from that, La Finca was born.

La Finca’s decentralized model empowers farmers through it’s non-profit hemp-grower’s association. Farmers use La Finca’s seed, receive training from the association and are asked to commit to sustainable agricultural guidelines put forward by the Food and Agriculture Organization (FAO), an arm of the United Nations.

“We’re not going to be buying land to hire farmers. We are going to be seeing the farmers as equals, as partners,” Zalez said.

One tribe of indigenous Colombians drove 14 hours to speak with the company about growing hemp. “We were very honoured,” Zalez said about the meeting.

Dr. Rafael Latorre, besides his role as medical director with La Finca, is also part of the UN Committee for Indigenous Rights. With a personal interest in sugarcane farming–it’s his land being used for the company’s pilot project, around half a hectare–a total synthesis of his interests made the offer to join La Finca too irresistible.

“It’s a way to procure or sustain agriculture ways in a sustainable, environmental way. The full focus of the association for growers is to help the growers,” Latorre said.

The company is still far from full-scale production and distribution, but doctors in Colombia can provide patients with customized CBD prescriptions sourced from La Finca hemp.

La Finca is taking this time to acclimate their product to Colombia’s unique environment. The country has five independent climates, a challenge in terms of seed selection, but also an opportunity: crops like hemp can be grown in-country all year.

Taking La Finca global

La Finca’s management wants to take the company’s hemp global. It’s ambitious, and they’re the first to admit it, but Colombia has become a major medical cannabis hub in recent years.

Coupled with the country’s free-trade agreements with the E.U. and U.S., Latin America’s low labour costs and ideal growing conditions, there’s opportunity to be had.

Read: The advent of Mexican cannabis

The company already has its export license. And instead of creating a generic product for mass distribution, La Finca’s management said they aim to tailor their offerings to each market’s individual needs.

“Depending on the market destination, we can adapt to the requirements. For instance, in the U.S. the THC content within CBD is 0.3%. That is not the case in Europe which can be I think 0.9% or below or Japan that is 0% THC,” Zalez said.

The company is currently meeting with doctors as part of their education platform with the aim of increasing physicians’ comfort level around prescribing La Finca’s CBD products.

The regulatory process in Colombia is more nuanced than in Canada. Companies like La Finca must first pass clinical trials for their product to be considered pharma-grade.

This process is lengthy and time consuming, but a lower level of certification allows a customized version of the company’s product to be prescribed by doctors. This is how the company is currently getting its formulations to patients.

What La Finca aims to do is in equal parts ambitious and laudable, though the project is in its infancy. In Canada, Latorre says the trick is adapting the environment to the seed. In Colombia, it’s the opposite.

Suddenly, after more than five decades of fighting, cannabis is no longer the province of Colombia’s traffickers and guerrillas.

A plant which once helped finance their suffering has changed into a potential instrument of prosperity for its people.

“We think that La Finca will be the platform for the transformation of the many disadvantaged farmers of Colombia. We were able produce the best marijuana for illegal purposes in the past, now we are able to provide cannabis for humanity, for healing,” Latorre said.

In an age of peace accords and bullet pens, it’s not hard to believe.

Full disclosure: Chemesis International is an Equity.Guru marketing client.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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