Colombian Cannabis Leader up 90% in 4 Weeks and Just Getting Started

Colombia Landscape

The South American cannabis industry is set to grow into one of the largest cannabis markets in the world in the next 10 years.

According to The LATAM Cannabis Report from well-respected market research firm Prohibition Partners, medical cannabis sales in Latin America will explode to $8.5 billion in the next ten years, up from just $125 million in 2018.

Additional key details from the report:

  • Medical cannabis will account for more than two-thirds of the legal cannabis industry in Latin America, worth an estimated $8.5 billion.
  • The cannabis sector is set to grow by over 300% per year over the coming decade.
  • There are over 40 licensed producers in the region. Colombia has issued the most cultivation licenses in the region, with over 142 licenses to date.
  • Facility and construction costs are 80% lower than in North America and Europe.
  • Chile and Mexico will be engines of growth in the medical sector while Uruguay and Colombia will encourage region-wide recreational cannabis legislation.
  • Patient numbers will increase significantly to over 4.6 million by 2028.

Last month I shared Khiron Life Sciences (TSXV: KHRN, OTC: KHRNF) – a young cannabis company headquartered in Canada that is in position to capitalize on South America’s cannabis market.

I think this second company is also in position to cash in.

This early industry leader:

  • was one of the first companies to land a permit to grow and sell medical cannabis in Colombia.
  • is rapidly increasing production capacity.
  • is already expanding into international cannabis markets such as Mexico and Italy.

Pharmacielo (TSXV: PCLO, OTC: PHCEF) is a Canadian-headquartered company that is an early leader in the high-growth South American and Colombian cannabis markets.

Shares are traded in both Canada and the United States.

In Canada shares began trading in late January on the Toronto Venture Stock Exchange under the ticker symbol PCLO. I see average daily trading volume of 626,000 so this ticker is plenty liquid.

In the US shares trade in OTC markets under the ticker symbol PHCEF. I see average daily trading volume of 82,000 so this ticker is plenty liquid too.

Pharmacielo is an early industry leader and a direct play on South America’s high-growth cannabis market. I see three key traits that tell me this company is ready to dominate.

#1 – Pharmacielo Was One of the First Companies to Receive a Commercial License to Grow and Sell Cannabis in Colombia

  • In June of 2016, Pharmacielo landed a hard-to-get cannabis manufacturing permit.
  • In October of 2017, Pharmacielo landed a cannabis psychoactive cultivation license and a cannabis non-psychoactive cultivation license.
  • In February of 2019, Pharmacielo registered 10 strains with the national cultivator. Below is a link to the press release if anyone wants to take a closer look.

PharmaCielo granted new cannabis licenses in Colombia as competition heats up in Latin America

#2 – Pharmacielo Is Rapidly Increasing Cannabis Production Capacity

The company is making big moves to ramp up its production capacity. In fact, Pharmacielo is in position to grow into one of the largest cannabis growers in the world. As it stands, Pharmacielo has a potential of more than 15 million square feet of cannabis production. That includes.

  • 1.3 million-square-foot nursery & propagation centre (company-owned)
  • 0.4 million square feet of open-air greenhouses owned by the company with an indigenous grower.
  • 13.3 million square feet of open-air greenhouse capacity accessed through contract growers.

#3 – Pharmacielo Is Expanding Into International Markets

In Mexico, Pharmacielo has partnered with MINO Labs SA, a local grower of premium medical cannabis, and expects commercial sales to begin in the fourth quarter of 2019. In Italy, Pharmacielo has partnered with Eugene, the patent-holding parent company of two unique Italian genetic research and technology-based companies.

Shares Have been Rallying on the Chart

Pharmacielo was a bit weak in February, but shares have been rallying in March, recently hitting a series of new 52-week highs.

The Big Picture on Pharmacielo

The South American cannabis industry is set to explode in the next 10 years. Pharmacielo is an early industry leader in position to capitalize on the boom. Shares look a little overbought in the short run. However, I expect big things from this stock in the future.

About the Author

Michael Vodicka is an equity analyst with more than 20 years of experience trading and investing. His research has been featured in some of the industry’s most respected publications. He has been investing and leading investors in the cannabis sector since 2013.