Khiron Life Sciences plans to be the first cannabis provider to hit the market in Colombia so the company has the best shot of becoming what CEO Alvaro Torres calls the “dominant brand” in Colombia and then throughout Latin America. But he realizes that in the long term, being first is not necessarily the most significant accomplishment.
“The most important is to be the best, not to be the first,” Torres says. “You can be the first with any product. Yahoo came before Google, so being the first doesn’t necessarily mean much if we can’t execute.”
Alvaro Torres
At more than two years into the company’s existence, the time for Khiron to execute its vision is now. It was the first company in Colombia to receive a license for the cultivation, extraction and domestic sale of cannabis following the legalization and regulation of the country’s medical market. And while it is working on getting its greenhouse up and running with the goal of having cannabis available for patients by October, Torres says the company’s primary focus right now is education.
“While we are cultivating, getting our mother plants and finishing the build-out of our facility, we need to start getting doctors to feel comfortable prescribing cannabis,” Torres says.
Khiron is a Canadian company with its main operation located in the Tolima region of Colombia, just southwest of Bogota, the country’s capital. The company is leasing a 450,000-square-foot facility with much of the space used for processing and extraction. The cannabis is grown hydroponically in steel-frame, polypropylene greenhouses designed to get the most out of the 12 hours of sun available nearly year-round along the equator. The site is also designed for expansion with room to grow to a full 2 million square feet as demand increases.
The Latin American markets represent a huge potential for investors. Khiron has been rewarded through several rounds of fundraising, with the company initially raising $2 million from investors in its first search for funding and then doubling the amount it sought during its second round, collecting $12 million when only asking for $6 million.
In May, Khiron was officially listed on the Toronto Stock Exchange under the symbol “KHRN.”
Torres attributes the company’s success in fundraising to not only the potential of the Colombian market, with its population of 50 million people and laws that allow exportation to other countries, but also to the strength of the team being built at Khiron. According to Torres, his company’s ranks are filled with lawyers, former employees at pharmaceutical companies and even former DEA agents who work on compliance.
“I’m the CEO of the company but I like to believe I’m the least accomplished person on the team,” he says, though that is not entirely true.
Torres is an engineer by trade, having graduated from Rensselaer Polytechnic Institute in Upstate New York. He received his MBA from Georgetown and worked as the general manager of an engineering firm before leaving that field to work in investment banking.
“I’m very familiar with how to build things and how to get them financed,” he says. “It’s not the first time I am building things.”
Torres says the key to success in Colombia and beyond will be in changing the minds of doctors and patients about what cannabis is and what it can do. He says the country’s history with illegal drugs has created a stigma that medical marijuana providers have to get around in order to make people realize that it can be a legitimate medicine.
Khiron’s semi-enclosed greenhouses are supported by a state-of-the-art hydroponic growing system.
“This is not about Colombians smoking marijuana on every corner,” he says. “It’s about patients that suffer from pain that can replace opium-based medications with cannabis.”
To that regard, Torres says he supports the Colombian government’s decision to limit the country’s medical marijuana program to extracts, instead of allowing the sale of flower. Torres expects Khiron’s extracts to be on the shelves by this fall at the latest.
“Considering the history of the country and the barriers we have to break, I think it was the best idea because we can separate the medical cannabis aspect from the recreational side, which has a lot of implications in Colombia,” he says.
For now, Torres is focused on building not just Khiron, but a network of clinics around the countryside populated with doctors who understand what cannabis can do and how to prescribe it effectively for patients.
“I think for us, it’s how to support a network of patients that is loyal to the brand, loyal to the company,” Torres says. “We don’t forget patients are the center of the company.”