Khiron Life Sciences has signed a binding LOI to purchase 100 percent of NettaGrowth, valued at $13.7 million. 

This is a big deal for cannabis in South America because it means that Khiron has become the first company to secure a medical THC & CBD cannabis cultivation capacity in Uruguay, the world’s first ever country to permit legal weed.

Now, Dormul is in possession of a medical cannabis cultivation license that will enable it to supply commercialized weed for the entire jurisdiction. The cultivation capacity is set at 170,000 plants. Moreover, the deal solidifies Khiron’s entry to the Brazilian market.

Khiron is getting in at the ground floor of Latin America’s cannabis industry

The integrated medical cannabis company boasts primary operations in the nascent Latin American market and, thanks to its most recent acquisition, Khiron will take ownership of all Dormul S.A.’s outstanding shares, conducting business as Cannapur.

Once produced, the THC-rich medical cannabis produced by Dormul will be commercialized throughout Uruguay. Khiron can take advantage of this opportunity by broadening its cultivation capacity to a third jurisdiction. Additionally, the Mercosur Regional Free Trade Bloc is in Khiron’s favor. The company aims to target 85 million people in Brazil’s southern region, which is predicted to emerge as a major export market.

Under the terms of Khiron’s agreement to acquire 100 percent of NettaGro, 8,498,821 common shares will be issued to NettaGro’s shareholders. The considered price per common share is said to be $1.61.

Khiron’s board set to grow after Uruguay cannabis acquisition

After the completion of the acquisition, Canadian entrepreneur Joseph Mimran is set to join the board of Khiron’s subsidiary, which operates out of Colombia. The subsidiary will strategically counsel Khiron on how to package cannabis-containing goods properly and establish a retail development strategy for Latin America’s cannabis market.

Mr. Mimran has co-founded Gibraltar and Company. Based in Toronto, the venture investment firm provides financial support for committed entrepreneurs. Club Monaco and Joe Fresh are just two examples of the brands that the firm is responsible for helping to grow.

Someone else has agreed to join Khiron’s board of directors after the transaction has been finalized: Michael Beck. The equity investor declared that his decision to join is subject to receipt of all required approvals.

Khiron may benefit Uruguay’s economy

Recently acknowledged by the Uruguayan Ministry of Industry for its positive social and economic influence on the country, Dormul is also awaiting the reviewal of an extraction license.

“As we develop our patient network in Uruguay and into Brazil, joining the Khiron family gives us access to their market leading expertise and resources, to accelerate our research and development mission, and to deliver medical cannabis products across one of the world’s largest trading blocs. We begin with Uruguay, and export to Southern Brazil, and expect to move quickly across the regions trading countries,” concluded the founder of Dormul, Marco Algorta.