Chemesis International (CSI.C) subsidiary La Finca licenses three farms, continues their climb to prominence

Chemesis International’s (CSI.C) subsidiary La Finca Interacviva-Arachna Med SAS has received cultivation licenses for three farms near Bogota, Colombia.

These three farms add to Chemesis’ holdings in Latin America and assist with establishing their cultivation operations while maintaining their first mover advantage.

The company currently has five acres planted for its spring harvest with plans to expand to over 100 acres once the harvest is complete. The new acres will be focused on growing biomass but also contribute to expanding La Finca’s seed stock.

La Finca will move into its 14,000 square foot facility by the end of the fiscal fourth quarter because of the expected increases in biomass production. The space is close to Bogota’s city centre and includes access to the company’s growing operations and an airport. This will help the company cut transportation costs.

La Finca at a glance:

  • 1,000 acres of outdoor cultivation
  • Partnership with the largest university in Colombia, Universidad Nacional de Colombia to develop seed strains that improve the yield of biomass and flower while shortening crop cycles.
  • Partnership with the Universidad Francisco José de Caldas, focusing on educational aspects of cannabis cultivation.

La Finca has also established a non-profit hemp-grower’s association. The non-profit seeks to bring together agro-industries and marginalized farming communities, such as indigenous, Afro-Colombians and other small farmers with technical advice, seed and a crop purchasing program.

The company’s cultivation program’s decentralized model allows partner farmers from across the country to quickly generate high quality crops.

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.

La Finca has built relationships with over 2,000 farming families across Colombia.

The association has enlisted Ricardo Garzon, an expert in implementation of sustainable projects with a CV full of major organizations, including The World Bank, International Finance Corporation.

The proposed sustainability model will be presented to Colombian communities allowing La Finca to add another 2,000 plus farming families and over 10,000 acres to its holdings within three years.

“Mr. Garzon is a welcomed addition and brings a wealth of experience to Chemesis’s Latin American team. The company believes his expertise and relationships will allow Chemesis to expand its operations significantly through the Association for the Promotion of Cannabis Cultivation,” said chief executive officer of Chemesis, Edgar Montero.

Chemesis has also raised $1.05 million in three tranches of a private placement, issuing a total of 567,567 shares for $185 per share and one common share purchase warrant. Each is warrant exercisable for a period of 60 months at a price of $2.50 from closing.

The importance of Latin America

Latin America is a continent brimming with potential for enterprising cannabis companies.

Read: The advent of Mexican cannabis

Latin America has low labour costs, ideal growing conditions and few companies competing for space in a region that boasts 620 million people. That’s bigger than Canada, the United States and Germany combined.

Located close to the equator, Colombia enjoys a year-round 12-hour sun cycle that allows for harvesting to occur 365 days a year. Colombia’s many free trade agreements allow for cost effective export of cannabis products around the world.

We think this company is onto something.

Chemesis International shares slid $0.21 to close at $1.59.

The company has 77,854,161 shares issued and outstanding with a market cap of $140 million.

—Joseph Morton

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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