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May 27, 2023


Investment information for the new generation

Chemesis (CSI.C) adds 3 dispensaries and a hemp cultivation license

Some of our clients are too quiet.

They’ll go months without putting out a press release.

When we call to verify that there’s still someone in the office, we’ll receive a riveting impromptu verbal update.

Other clients are too noisy.

Yes – it’s good to keep the name of your company in the news.

But if it’s a relentless drip of triviality, at a certain point, shareholders “tune it out”.

Snap Quiz: Which of the following is a newsworthy event:

  • An L.O.I with a web developer
  • Stock option re-jig for the CTO
  • Packaging re-design of a single product
  • Attendance at a virtual investor conference
  • The hiring of a “branding consultant”.
  • Successful bowel movement by the CEO
  • None of the above

If you guessed “none of the above” – you are eligible to enter a draw to win a free Equity Guru fridge magnet.

There is a 3rd rare category of client with a different problem.

This company puts out tsunami of news and it’s all significant.

Try to cherry-pick it, edit it, censor it – and the story jigsaw has missing pieces.

Exhibit A: on September 11, 2019 Chemesis International (CSI.C) Chemesis announced that its subsidiary, Natural Ventures has entered into an agreement to purchase three cannabis dispensaries in exchange for $1.3 million USD in cash over 24 months.

The Dispensaries are currently operating under the Caribbean Green brand and will generate approximately $3,600,000 USD in revenues for calendar 2019.

The Dispensaries are located near the major city of San Juan.  On completion of the transaction, CSI will own eight dispensaries in Puerto Rico, with an additional five pre-qualified dispensaries that are in various stages of development.

“Chemesis’s subsidiary Natural Ventures continues to solidify itself as the largest vertically integrated cannabis operator in Puerto Rico,” said CEO, Edgar Montero. “Acquiring additional dispensaries fits within Chemesis’s strategic plan to ensure our manufactured products and brands receive priority retail exposure.”

Two days earlier, CSI announced its subsidiary, Natural Ventures and its partner Medical Cannabis received one of the first hemp cultivation and processing licenses in Puerto Rico.

Natural Ventures will begin planting an initial high potency hemp CBD crop “in the coming weeks.”

Through its existing licenses and infrastructure, Natural Ventures will continue manufacture, process and distribute the following products to retail consumers in Puerto Rico.

  • Cosmetics
  • Tinctures
  • Patches
  • Beverages
  • Edibles
  • hemp-derived CBD infused products.

Chemesis is a vertically integrated U.S. Multi-State operator with International operations in Puerto Rico and Colombia.

CSI 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.

For a vibrant growing cannabis company, the September 9, 2019 hemp cultivation news might be an honest month’s work.

But check out the news flow from CSI in the last month.

August 29, 2019:  “CSI closed its all-shares deal to acquire controlling interest in Puerto Rico based GSRX Industries today,” wrote Equity Guru’s Joseph Morton.

“With the completion of this acquisition, Chemesis adds to its asset investment portfolio, and also gains further access to decades of management experience in retail, operations and manufacturing. This combination of asset investments and talent will allow Chemesis to realize efficiencies throughout its processes, and is expected to increase operating margins throughout the company’s supply chain,” said Chemesis CEO, Edgar Montero.

Here’s what GRSX adds to CSI’s portfolio.

  • Five operational dispensaries in Puerto Rico
  • An additional five prequalified dispensaries in Puerto Rico
  • A fully licensed cannabis distribution centre in Point Arena, Calif.
  • The Green Room, a boutique dispensary located in Point Arena, Calif
  • The Green Room, a 4,500-square-foot large-scale dispensary located in Palm Springs, Calif.
  • Retail CBD  stores in Texas and Tennessee

August 26, 2019: “CSI expanded its global footprint on Monday by announcing a new U.K. purchase order for its CBD products,” wrote Equity Guru’s Sam Bourgi, “The deal, valued at USD $1.1 million, allows Chemesis to tap into one of Europe’s fastest-growing CBD markets.”

“This purchase order allows us to access new revenues streams in the growing European market. As we continue to work towards accessing global marketplaces where cannabis is thriving, we hope to secure additional contracts and purchase orders,” stated Edgar Montero.

August 14, 2019:  CSI signed letters of intent with 34 private liquor stores in British Columbia to distribute their hemp-based chew products.

“As the brand and products continue to develop, the Company will look to replicate these type of distribution arrangements,” said Edgar Montero.

August 12, 2019: CSI announced that it will start manufacturing, packaging and distributing its own line of tobacco-free smokeless cannabis and hemp-derived chew in Puerto Rico and Canada and the U.S.

Customers can expect the “tobacco-free smokeless cannabis and hemp-derived chew” to be available for purchase by early Q4 2019.

August 5, 2019: Chemesis announced that it has entered into a binding share exchange agreement with GSRX Industries to up its position in GSRX to about 66%.

Upon acquiring a controlling interest in GSRX pursuant to the Acquisition, Chemesis will effectively be a fully vertically-integrated, multi-state operator with assets in six states which includes California, Tennessee, Arizona, Michigan, Texas, and Puerto Rico, with significantly-enhanced consolidated gross revenue projections, estimated to be approximately $75,000,000 USD for the 2020 calendar year.

As you see from the above chart, despite the rapidly expanding business core, CSI stock price has been caught in the general downdraft of the cannabis sector.

Two months ago, CSI announced a partnership with U.S.-based Happy Tea, a brand of CBD-infused sachets and shots.

At the closing of the deal, CSI received a CND $5.2 million minimum purchase order.

When the cannabis investment community wakes up again, there will be a lot of news on the doorstep.

Full Disclosure: Chemesis is an Equity Guru marketing client.

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