Reading Chemesis International’s (CSI.C)‘s July 26, 2019 “operational and corporate update” is like watching footage of a toddler vacuuming a living room.

Is it CGI?

How can this young company do such adult things?

Chemesis has 4 main branches of operation:

• Cultivation:  Hemp cultivation in Michigan, grow facility in Puerto Rico with 30,000+ lb overall grow capacity. Grow opportunities currently under review in California. Also, a 1,000-acre Colombian grow facility in development.
• Manufacturing: extractions, formulations and products, specializing in BHO, alcohol and CO2 extraction with the current capacity of over 2,000 lbs of raw material a day.
• Distribution: With new regulations impacting the California market, Desert Zen has emerged as a fully compliant first mover. In the Puerto Rico market, CSI serves the entire island from seed to sale.
  Retail: Chemesis distributes and transports California Sap, Jay and Silent Bob’s Private Stash and third-party brands to over 600 dispensaries in California and Puerto Rico.

Despite the hyper-speed growth of Chemesis’ business operations, CSI share price has mimicked the movement of big-cap weed companies like Canopy (WEED.T), Aurora (ACB.T) and Cronos (CRON.T).

Q3, 2019 Chemesis Fiscal Highlights:

• Revenue of $3.7 million, a 33% increase over the previous quarter
• Gross profit of $1.1 million.
• Closed the acquisition of La Finca, an integrated Colombian cannabis company with access to over 1,060 acres of outdoor cultivation.
• Signed agreement to manufacture a proprietary patent-pending THC flake.
• Partnership with First Medical Cannabis bringing immediate access to 1,000 acres of hemp cultivation in Puerto Rico, with an option to expand to an additional 5,000 acres.

Partnerships

Chemesis’ 19.9% stake in GSRX Industries has steadily increased revenues for CSI, as it expands dispensary network throughout Puerto Rico, California and Tennessee.

Rapid Dose is working with Chemesis to commercialize its QuickStrip Oral Thin Strips in Puerto Rico, California and Michigan.

An association formed by La Finca Interacviva Med is working in Colombia with farming communities to bring education and opportunity through cannabis cultivation. The association anticipates an additional 10,000 acres in the next three years.

United States

In July, the California operations team processed over 3,000 lbs of trim as it ramps up production at its extraction facilities. The company increased its THC-infused product portfolio in 2019, with a focus on beverages, edibles and topicals, and received a USD$4,000,000 minimum purchase order from Happy Tea to manufacture and distribute products.

Chemesis is prepping to plant its first 13 acres of hemp in Michigan under the previously announced cultivation license, and Desert Zen is expanding its reach to additional dispensaries in central and southern California. The company’s Arizona CBD manufacturing facility is providing third-party manufacturing services as it works towards GMP certification.

Puerto Rico

CSI is working with PR ONE to meet a USD$6,000,000 annual minimum purchase order. Natural Ventures increased its cultivation area to yield 9,000 lbs per year.

Colombia

La Finca is on track to increase its land package by 10,000 acres within the next three years, and ommenced agronomic evaluations in three subregions. This is a prerequisite to get a commercial cultivar certification per seed type on each of the 12 subregions.

Within six months La Finca expects to be starting its propagation plan, and for both the extraction and cosmetics manufacturing lab, constructed under GMP and EU GMP standards.

Obtaining THC cultivation and manufacturing of THC derivatives licenses would allow Chemesis to participate in one of the fastest-growing medical cannabis markets in the world.

“CSI has made great strides in Latin America, including in Colombia through its local subsidiary, La Finca Interacviva-Arachna Med SAS,” wrote Equity.Guru’s Ethan Reyes. “With nearly one billion people on both continents, it’s clear Chemesis has its eye on the Americas while others turn to Europe.”

CSI’s branded products have attracted an endorsement/collaboration with filmmaker Kevin Smith and “Silent Bob.” Chris Parry considers Kevin Smith “one of the top three best endorsement targets (for a cannabis company) in the world today.”

 “@jayandsilentbob used to sell weed in the movies,” Smith wrote in a recent Instagram post. “Now, thanks to the good folks at @chemesis.tv, Jay and Silent Bob are selling weed in real life!”

“Chemesis continues to execute on long-term growth targets by building its cultivation, manufacturing, extraction, and brands in the areas that it currently operates,” Montero said in the corporate update.

Chemesis has access to $32.6 million in drawdown equity facilities.

In a May 27, 2019 podcast, Montero spoke with Equity.Guru’s Guy Bennett about the personal catalyst that propelled him into the cannabis industry, and how CSI cross-pollinates innovation between its international operations.

For some toddlers, vacuuming is easy.

What’s next for CSI? Weed whacking?

—Lukas Kane

Full Disclosure: Chemesis is an Equity.Guru marketing client.