Avicanna Inc. (TSX: AVCN) is likely the first cannabis company to start clinical trials involving cannabinoids in Colombia or on derma-cosmetics containing cannabinoids in the world
SmallCapPower | August 6, 2019: Avicanna Inc. (TSX: AVCN) is a biopharmaceutical company focused on the research, development, manufacturing and commercialization of plant-derived, cannabinoid-based products. The Company operates through four main business segments:
- Pharmaceuticals – Indication-specific, cannabinoid-based pharmaceuticals (dermatology, pain, neurology, oncology, gastrointestinal, and psychiatry) with several products in various stages of pre-clinical and clinical development.
- Phyto-therapeutics – Its phyto-therapeutic product line is plant-derived cannabinoid-based therapy designed for medical use in a range of formats, such as transdermal patches, topicals, tablets, sublingual sprays and oil tinctures – this line is expected to launch in early 2020;
- Derma-cosmetics – Its derma-cosmetics product line is formulated to maintain the health and beauty of the skin, and includes anti-aging and skin moisturizers. These products are expected to be on the market before the end of Q4/19
- Cannabis Extracts and Purified Cannabinoids: Large-scale, low-cost, organic, and sustainable source of THC/CBD-based cannabis extracts/purified cannabinoids for B-B, medical, cosmetic and pharmaceutical companies;
Read the press release: Avicanna Announces Commencement of Clinical Trials for Derma-Cosmetics
Majority stake in two cultivation assets in Colombia, Santa Marta Golden Hemp (SMGH) and Sativa Nativa (SN), with optimal growing conditions to drive favourable production economics. Both assets are in Santa Marta, Colombia, in the foothills of the Sierra Nevada, where a unique microclimate provides optimal growing conditions with 12 hours of sunlight and low relative humidity. This allows for four harvests a year without artificial light. Both assets have a current capacity of roughly 290,000 square feet, which is expected to be increased to a combined capacity of roughly 410,000 square feet by end of 2019.
Santa Marta Golden Hemp:
- 220,000 square feet of cultivation capacity yielding 12,000 kg of dried flower annually
- Expandable to 290,000 square feet by end of 2019.
- Expected annual yield: 16,800 kg of dried flower/year
Santa Marta Golden Hemp greenhouses in operation and construction
Inside one of the greenhouses at Santa Marta Golden Hemp
Source: Ubika Research
- 70,000 square feet of cultivation capacity with an estimated yield of 3000 kg of dried flower/year
- Avicanna plans to expand the facility to 120,000 square feet
- Expansion is estimated to yield 6,000 kg of dried flower/year
Inside one of the greenhouses at Sativa Nativa
Avicanna’s Colombian subsidiaries each have federal licenses to cultivate and export crude cannabis oil, distillates/isolates, and finished products. The Company is one of a few Colombian operators that has its cultivars registered by with the Ministry of Justice and Law, a requirement to be able to cultivate for commercial purposes and generate revenue. More importantly, the final products will be produced under Good Manufacturing Practices (GMP) by Altea Farmaceutica S.A.
Strategic partnership with Altea Farmaceutica S.A., the exclusive manufacturer of cannabinoid products for Avicanna: On December 11, 2018, Avicanna entered into an agreement whereby Altea will manufacture, analyze, package, label, store and release Avicanna’s phyto-therapeutic and derma-cosmetic products for distribution or export. Altea Farmaceutica will manufacture the products in its 23,895 m2 GMP facility, which has Health Canada, INVIMA (Colombia), ANVISA (Brazil) and DIGMID (Peru) approvals.
Lower labour expenses provide cost advantages. Labour and development costs are significantly less expensive in Colombia compared with Canada or the U.S. Generally, in Canada about $1/gram of dried flower is considered cost-effective. Although both outdoor and greenhouse cannabis prices justify higher price points than outdoor cannabis, the economies of scale in Colombia are estimated to achieve COGS of about $0.10/gram of dried flower. This low-cost advantage could make Avicanna a cultivation competitor on a global scale.
Closeup of an outdoor cultivation section at Santa Marta Golden Hemp
Source: Ubika Research
Evidence-based and an R&D focused company: Avicanna has been researching potential benefits of cannabinoids for the past 2.5 years. The Company is the first cannabis company to be admitted into the Johnson & Johnson Innovation Centre JLABS in Toronto’s MaRS Centre, in addition to research partnerships with the University of Toronto and The Hospital for Sick Children. Avicanna’s approach to R&D is scientific, evidence-based, and data-driven. The Company has over 20 scientists and medical doctors, who perform research into the therapeutic potential of cannabinoids. This allows for the development of cannabinoid-based solutions for a wide range of markets, including derma-cosmetics, phyto-therapeutics and pharmaceuticals.
Pure EarthTMSource: Avicanna Corporate Presentation
Joint Venture with El Grupo Daabon allows Avicanna to capitalize on Daabon’s well-established international infrastructure and organic expertise. El Grupo Daabon is a South American company dedicated to organic agriculture, with 15,000 hectares of land under cultivation and 3,000 employees. The Company has over 100 years of experience growing and processing palm oil, bananas, avocados and coffee beans. Avicanna’s research and biotechnological developments in the cannabis sector will be complemented by Daabon’s agriculture expertise. Through this partnership, Avicanna can capitalize on Daabon’s well-established roots in the agricultural industry. Of note, Daabon’s principles led Avicanna’s IPO financing round by subscribing up to 20 per cent of the first tranche of the brokered private placement.
Avicanna’s research is mainly conducted in the Johnson & Johnson Innovation Centre, JLABS, within the MaRS Centre in Toronto. The relationship with JLABS benefits Avicanna, as it provides access to a 40,000-square-foot R&D facility, which includes lab space, state-of-the-art equipment, and access to the scientific community. JLABS operates on a no-strings-attached model of incubation accelerators that do not take any equity or any rights to products, revenue, or control. Avicanna is the only cannabis company to operate in JLABS.
Clinical partnerships with world-renowned medical institutions and scientists: Institutional partnerships include the University of Toronto; The Hospital for Sick Children; The University of the West Indies in Kingston, Jamaica; Universidad de Antioquia in Medellin, Colombia; and Centro de Atencion e Investigacion Medica CAIMED S.A.S. in Bogota, Colombia. Of note, the University of Toronto partnership is with the Christine Allen Research Group at the Leslie Dan Faculty of Pharmacy, which is considered a world leading laboratory in nanomedicine and drug delivery research. These partnerships allow the Company to further strengthen its R&D efforts towards innovative CBD/THC product formulations.
Pure ElementsTMSource: Avicanna Corporate Presentation
Cashed up and ready to grow. Avicanna listed on the TSX in July 2019. In April 2019, Avicanna closed its special warrant private placement for $22.1M at $8 per special warrant. As a result, the Company is in a strong cash position to execute on its target of reaching cash flow by year-end.
Visit Avicanna.com to download the corporate presentation and find out more about the company.
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