The new Colombian government has included plant-based medical cannabis products in the list of mandatory insurance covered medications starting January 1st 2023. The government has also signed the first of its kind medical cannabis contract with one of Colombia’s largest insurance companies.

Resolution 2808 was signed by the Ministry of Health and removed unintended ambiguities that had arisen whether plant-based magistral preparations from medical cannabis were also included in the insurance coverage.

The new government of Colombia is committed to the use of medical cannabis as a covered treatment under the health system. Even using this iteration to validate medical conditions where they find moderate to strong evidence that cannabis is an effective treatment. These conditions, which were evaluated by the Technical Institute of the Health Sector (IETS) include chronic and neuropathic pain, oncology pain, sleep disorders, epilepsy, and fibromyalgia.

One company benefiting from this news is Khiron Life Sciences, a global medical cannabis company with core operations in Latin America and Europe. The company has a sales presence in Colombia, Germany, the United Kingdom, Switzerland, Peru, and Brazil.

During the first half of 2022, insurance covered prescriptions represented more than 90% of Khiron’s cannabis sales in Colombia. With a patient base of more than 25,000 in the country, Khiron will immediately resume filling insurance-covered prescriptions through its Zerenia clinic network. Zerenia Colombia being Khiron’s wholly owned medical cannabis clinic network.

Speaking about Zerenia, Zerenia Colombia has entered into a contract to provide “Integrative Health Services and Pharmacotherapeutic Treatment with Medical Cannabis” with the largest government owned insurance company with more than 1.2 million insured individuals. This is the first time an insurance company in Latin America is contracting medical cannabis specific services and products.

The benefits are obvious: this is an opportunity for Khiron and Zerenia to expand its client and patient base in Colombia.

Alvaro Torres, CEO of Khiron, comments: “Today is a great day for patients in Colombia and Khiron. We welcome the decision from the new Colombian government to categorically mandate insurance coverage for our medical cannabis products. With this decision, Khiron will immediately tackle the backlog of covered medical cannabis products to our patients. In parallel, we have also secured a first-of-its-kind contractual relationship with one of Colombia´s largest government-owned insurance companies for medical cannabis specific healthcare services and dispensation. These two achievements, will allow us to revert to predictable recurring revenues, shorter collection periods and improved cashflow.”

At time of writing, the stock is up over 33% with nearly 600,000 shares traded on the day.

On the technicals, it appears a bottom has been formed and confirmed with this breakout. The stock was ranging at record lows in the month of December 2022.

Going forward, I would like to see the stock build on this momentum. This requires a close above the $0.11 resistance zone. If we can confirm a close above this level, then a new uptrend has begun and traders/investors can ride the waves of higher lows and higher highs.