Khiron Life Sciences (KHRN.V) has added two former Canopy Growth (WEED.T) executives to spearhead European operations in a move designed to grab as much market share across the pond as possible.
Prohibition Partners estimates the European medical cannabis market to be worth €115.7B by 2028, making Khiron’s headhunting all the more valuable.
Tejinder Virk, now president of Khiron Europe, was formerly the deputy managing director of European operations for Canopy. During his tenure, Virk was integral in developing key client relationships throughout Europe, the middle East and Africa.
Virk’s rolodex is what Khiron is paying for here. His connection to European family offices and financial institutions will give the company access to the levers of power on the continent in the same way bringing former Mexican president Vicente Fox onboard gave the company an enormous advantage in Latin America.
The same can be said for Franziska Katterbach, formerly Canopy’s head of legal operations and now Khiron Europe’s chief legal officer.
Katterbach brings an intimate understanding of the intricacies of European cannabis frameworks to ensure Khiron gets into target markets as smoothly as possible.
It’s as much a ‘who you know’ game as much as it is simply implementing EU-GMP practices.
“We are excited to welcome Tejinder and Franziska to our team. With a strong regional leadership team now in place, Khiron is actively executing on its global expansion strategy with the aim of establishing market share in the rapidly emerging European medical cannabis market.
–Alvaro Torres, Khiron CEO
Khiron’s addition of these two key personnel dovetails with the recent EU-Mercosur trade deal which allows the company to use its Uruguayan assets to export to Europe.
The European market
Stephen Murphy, managing director of Prohibition Partners, said patient numbers in Europe “are below 100,000 across the region but this number is set to grow to over 30 million in the next ten years.”
In 2018, six European countries unveiled cannabis legislative frameworks and patient numbers grew by over 40% month-over-month.
Over 20 countries on the continent have legalized some form of cannabis, whether medical cannabis or cannabis-based medicine, with 12 other European nations having decriminalized it.
Earlier this month, Luxembourg confirmed its plan to become the first European country to fully legalize cannabis.
Etienne Schneider, Luxembourg’s health minister, encouraged other European nations to relax their cannabis drug laws in violation of UN conventions on cannabis prohibition.
Khiron’s performance today
Khiron Life Sciences is down 1.4% to CAD$2.05 on the day. The company has a market cap of $236M with 114 million shares currently outstanding.
The company has seen a downward slide since mid-May as disappointing revenues and the occasional black-eye bring the entire sector down.
But Khiron is busy focusing on fundamentals while everyone else is pumping out meaningless press releases like:
- “Canopy Growth to teach seniors about pot”
- “Beleave begins selling Blue Dream strain”
The company has access to the enormous and untapped Brazillian market, and it has LatAm on lock with board members like Fox on the team. During my time in Colombia, I saw the company’s Kuida brand of cosmeceuticals in nearly every department store and pharmacy I visited.
Khiron has a different business model than your run-of-the-mill grower. That’s why Jaime Carrasco of Cannacord called the company one of his top picks earlier this month.
Seriously, Khiron is a dark horse in the cannabis sector. Don’t let the rumour mill put you off, these guys mean business.
–Ethan Reyes
Full disclosure: Khiron Life Sciences is an equity.guru marketing client.
