Khiron: This Cannabis Stock Could Be The Perfect Takeout Target

Summary

• Khiron Life Sciences was the first Colombian medical cannabis firm to be listed on a global stock exchange.
• Canadian cannabis firms have announced a slew of acquisitions in Latin America in a race to establish themselves in the continent.
• Khiron is uniquely positioned as the leader in the Colombian medical cannabis market and has attracted prominent Board members including the former Mexican president.
• Investors wanting to bet on M&A speculation should consider Khiron while fundamentals investors should wait for a better entry point.

Welcome to our Discover Cannabis series, where we publish in-depth research to introduce new cannabis companies to our coverage.

Overview

Khiron Life Sciences (OTC:KHRNF) is a little-known cannabis company based in Colombia, and we believe it is a prime takeout target for large Canadian cannabis firms that are looking to get a foothold in the Latin American market. We have seen a wave of Canadian firms acquiring Latin American assets including Canopy's (CGC) acquisition of assets to form its LATAM subsidiary, Aphria's (APHQF) acquisition of LATAM Holdings from Scythian (SCCYF), Aurora's (ACB) acquisition of ICC Labs (ICCLF), and Cronos' (CRON) 50/50 joint venture, NatuEra, in Colombia. As if the list isn't impressive enough, one can easily tell that most of the top Canadian LPs have been scooping up Latin American assets at a fast pace. We think the trend will continue as the rest of Canadian LPs look to catch up and acquire strategic assets in the continent. Other players that could potentially acquire assets in LATAM include Tilray (TLRY), CannTrust (CNTTF), and HEXO (HYYDF). We think Khiron represents an extremely attractive target as our analysis will show.

Company Overview

Khiron operates a medical cannabis operation in Colombia and has a vertically-integrated operation from cultivation to medical clinics. The Colombia cannabis market was legalized for medical purposes in July 2016 and currently only allows the sale of extracts. Besides a large domestic market, Colombia has been viewed as an optimal platform for further expansion in South America as other countries progress towards legalization. Khiron is the leader in Colombia's domestic market as it was the first Colombian medical cannabis firm to list globally, the first to be licensed for its CBD cosmeceuticals, and one of the first to receive cultivation and sale licenses for THC cultivations.

(Investor Presentation)

The leadership

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.