Last week, Khiron announced a major milestone and reported to have successfully completed its first sale of medical cannabis product in Brazil. By leveraging production, distribution, marketing agreements with leading pharmaceutical distributors, and clinical assets in Latin America, Khiron plans to expand its presence in Brazil.
One of the reasons we are bullish on Brazil is the sheer size of the market. With a population of 200+ million, Brazil is the largest market in Latin America. According to New Frontier Data, Brazil’s addressable medical cannabis market could reach $1.4 billion in annual revenue.
So far this year, Khiron has been nothing short of an execution story and has been treating thousands of patients in Colombia, Peru, UK, Germany and now in Brazil. Going forward, the company plans to expand the Zerenia™ clinic model into Brazil and we expect this development to serve as a catalyst for growth as it provides patients with access to premium medical cannabis products. Currently, Khiron is communicating with several medical clinics to expand its clinic model into Brazil and we are favorable on how the management has advanced this aspect of the story.
Brazil is an emerging cannabis market that is largely underserved, and we are favorable on the potential for Khiron to capture market share. By providing patients with affordable high-quality products and a seamless patient experience, management sees an opportunity to disrupt the Brazilian market. We believe the company’s strategic alliance with CANNAB, a leading medical cannabis patient association in Brazil that connects physicians, patients, academic institutions, and suppliers, is an attractive aspect of the story.
Through the alliance, Khiron has been able to treat a three-year old child from Salvador de Bahia who suffers from epilepsy. She is the first Brazilian patient to receive Khiron’s medical cannabis product and has received six units of high-CBD 100mg/50ml extract. Khiron accomplished this by working with ANVISA (the Brazilian National Health Surveillance Agency) and will collaborate with CANNAB to continue to offer its medical products to patients in need.
This year, CANNAB expects to help over 2,000 new patients gain access to medical cannabis products and we are bullish on this aspect of the story. According to Prohibition Partners, the Brazilian medical cannabis user base could reach close to 3 million people in the next few years, and we are favorable on the first mover advantage Khiron is building.
For several years, Khiron’s management team has been focused on the cannabis opportunity in Brazil and the business is well positioned to benefit from the growth of the market. By forming strategic partnerships to increase product awareness and medical cannabis education for health care providers, the company is positioned to benefit from a steady rise in number of medical cannabis patients.
We are confident in Khiron’s expansion strategy due to the exclusive relationship that it has with Medlive, a pharmaceutical and health products distributor that has a network of over 3,000 clinics and hospitals in southern Brazil. The company also entered a marketing contract with TAIMIN, a leading medical distributor in Rio de Janeiro, Sao Paulo, and northern Brazil. These relationships are expected to provide Khiron with broad regional coverage across Brazil and should expand its network of prescribing physicians.
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