Chemesis Partnership Expands Puerto Rico Footprint, Production Capacity; Plus Exclusive Interview with Board Member Deepak Anand

Chemesis International Inc. (CSE: CSI, OTC: CADMF, FRA: CWAA) is gearing up for the legalization of hemp in Puerto Rico with a recently-announced partnership with First Medical Cannabis LLC, bolstering its presence on the island and enabling it to cultivate high-yield hemp-derived CBD on an industrial scale for local distribution as well as to the US mainland.

First Medical Cannabis is the largest private provider in Puerto Rico, which currently has 75 open dispensaries serving 65,000 patients. That number is predicted to grow to well over 100,000 by December and into a $100-150 million annual industry.

Commenting on the strategic partnership, Chemesis CEO, Edgar Montero said, “Chemesis is very excited to continue growing the market in Puerto Rico as the value of P.R. as a hub is very promising. We expect the industry to grow exponentially and Chemesis will be set-up at the forefront to succeed.”

Changing Landscape

The CBD market is already growing at a rate much faster than any other aspect of the cannabis market, and the hemp-derived CBD market is forecast to be especially lucrative.

Prior to the US Farm Bill earlier this year, the US was the only industrialized country with a ban on industrial hemp, putting hemp-dependent companies under its jurisdiction at a distinct disadvantage. The adoption of the legislation will enable the cultivation of industrial hemp crops, and address the current shortage of CBD. As a result, new Puerto Rican regulations allow licensed facilities to incorporate hemp-derived CBD products in to their portfolios so long as they are entered into its tracking system and tested by licensed labs located in Puerto Rico.

 

Competitive Advantages

First Medical controls one of the largest privately-owned land estates in the Valley de Lajas, one of the most agriculturally-prolific regions in the Caribbean due to its ideal climate, fertile soil, and a geographical location which allows for a much longer growing season. The partnership is expected to produce multiple hemp crops annually, create hundreds of jobs, and bolster economic development in Lajas.

“Since the last of Puerto Rico’s sugar mills closed in 2000, the island has been in need of an agricultural revolution and the hemp industry promises much needed jobs,” Montero added. “Puerto Rico’s tropical climate makes the island an ideal competitor in the hemp industry. Furthermore, it will allow the Company to harvest up to three crops per year compared to one in many areas around the world.”

Chemesis will have immediate access to 1,000 acres for hemp cultivation, with the option to expand up to an additional 5,000 acres of prime agricultural land. Chemesis’ fully-compliant Puerto Rican extraction & manufacturing facility has the capacity to off-take all hemp produced by First Medical, process it into finished goods, and distribute them locally and to the continental US.

Montero continued, “As previously announced, the company has begun cultivating high potency CBD strains and will leverage its licenses and registered seed strains to develop high quality crops. With the passing of the 2018 Farm Bill, Chemesis has acquired the necessary assets and built strategic relationships which will allow the company to cultivate, manufacture, and ship finished goods across the United States.”

Chemesis plans to examine additional uses of industrial hemp such as a development of hemp bio-diesel to further diversify its offering.

Update on Colombian Operations

Puerto Rico isn’t Chemesis’ only regional presence; due to its own ideal growing conditions, low input costs, and the only Latin American government actively supporting the export of cannabis, Colombia is expected to become the hub of the red-hot emerging market.

In March, Chemesis’ wholly-owned Colombian subsidiary, La Finca Interacviva-Arachna Med, commenced large-scale cultivation after being awarded its seed producers license in January, the license enables the company to develop its own genetics catalogue as well as export high concentrate CBD genetics, distillates, and other manufactured products. The initial harvest is scheduled for Q2 2019 and La Finca is poised for expansion into large scale commercialization by Q4, having accumulated over 1,060 acres through its farming co-op.

La Finca is a founding member of Colombia’s Association for the Promotion of Hemp Growing, has established relationships with over 2,000 farming families throughout the country, and is involved in farmer education programs across the country. It has also partnered with Colombia’s largest university for research & development.

La Finca is proceeding with agronomic evaluations required by the Colombian Ministry of Agriculture to increase the number of cultivars it can use to achieve commercialization in all regions and climates across Colombia. It is currently licensed for five cultivars which will be harvested for domestic and international distribution, each one developed with the Universidad Nacional de Colombia using selective breeding methods to ensure each plant variety was developed to leverage Colombia’s climate while obtaining the highest quality and yields.

Montero said, “This is a significant step forward for Chemesis and the team in Colombia. The Seed Producer License not only allows the company to grow and harvest, but import and export cannabis derivatives and seeds. The Chemesis team has been working very hard to see our long-term vision take shape, and we see the ability to commercialize worldwide as a significant step forward.”

La Finca currently offers cannabinoid-based cosmetic products and is continuing to expand its product lines as the company grows. Through La Finca, Chemesis also controls a 10,000 sq. ft. greenhouse and is currently building a GMP-certified production lab and extraction facility in Bogota to supply the Colombian market as well as support export opportunities.

Chemesis’ close relationships with industry and political leaders have positioned it as a strategic first-mover in Colombia, Puerto Rico, as well as California, giving it a distinct advantage over much of its competition.

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