Photographer: Trevor Hagan/Bloomberg

Top Pot Grower in Uruguay Bucks Trend With Eye on Pharmaceutical

  • ICC to sign medical research deal with Institut Pasteur
  • Grower targets medicine as peers focus on recreational pot

Vancouver-based ICC International Cannabis Corporation will begin producing and exporting medicinal cannabis in Uruguay next year as competitors at home prepare to make a big push into the recreational marijuana market.

The company will change its name to ICCLabs before the end of the year or early next year, Chief Executive Officer Alejandro Antalich said in an interview Thursday at his office in Montevideo, Uruguay. “The idea is to become a pharmaceutical company.”

ICC is bucking the trend in the marijuana market as Canadian peers bet that recreational pot will drive growth when Canada legalizes weed next year. While ICC is Uruguay’s largest producer of the plant, the nation’s population of 3.4 million people and heavy government regulation limit expansion of its pot business. Canadian marijuana producers have surged 45 percent in the past year, beating ICC’s 13 percent decline during the same period, according to the BI Canada Cannabis Competitive Peers Index.

The rally in Canada is being driven by estimates that sales of recreational marijuana in Canada will surge to C$6billion ($4.7 billion) by 2021. Alcoholic beverage makers have already invested in the industry. Constellation Brands Inc. bought a 9.9 percent stake in Canopy Growth Corp. for C$245 million ($192 million). Canopy Growth sells medicinal-marijuana products in Canada. 

Antalich will team up with the Uruguayan arm of the Institut Pasteur de Paris to study the use of chemical compounds like CBD and THC to treat chronic diseases that have proven resilient to traditional medicines. ICC will start producing CBD extract, oil and crystals after it finishes a $10 million extraction laboratory next April with annual capacity of about 160 metric tons of hemp flowers.

The company is negotiating CBD presale agreements with a major Brazilian pharmaceutical distributor and two Canadian companies after striking similar deals with pharmacy operator Energia y Vida de Mexico and Canada’s Emblem Corp., Antalich said. The company doesn’t plan to tap markets again for funding in the near term after its C$20 million securities offering closes Nov. 22, he said. The company has also filed with regulators to grow hemp and produce CBD in Colombia, he said.

ICC should breakeven or even turn a profit in fiscal year 2019 on sales of about $80 million, said Antalich, who expects the CBD extraction business to generate about 85 percent of revenue that year. In its marijuana business, ICC plans to produce 5 tons next year and as much as 10 tons in 2019 with any surplus pot sent to the extraction laboratory to be processed for medicinal purposes, he said.

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