PharmaCielo Increases Cannabis Cultivation Through External Contractor to Meet Market Demand for Medicinal Extracts
- Company activates first external cultivation contract with local grower
- Increased volumes contribute to expanded 360 tonne biomass processing capacity of the Company's new Processing and Extraction Centre
TORONTO and RIONEGRO, Colombia, Aug. 13, 2020 /CNW/ - PharmaCielo Ltd. ("PharmaCielo" or the "Company") (TSXV: PCLO) (OTCQX: PCLOF), the Canadian parent of Colombia's premier cultivator and producer of medicinal-grade cannabis extracts, PharmaCielo Colombia Holdings S.A.S., announced today that it has activated its first external cultivation contract with a local grower. The contract, part of PharmaCielo's long-term external cultivation business growth strategy, provides the Company with a highly cost-efficient and flexible cultivation operation model which allows it to rapidly scale up production.
The enactment of the first medical cannabis farming contract will see PharmaCielo's cultivation immediately expanding by 32 percent to more than 1.6 million square feet (15 ha) with continued enlargement growing cultivated land to a total of 2.6 million square feet (24 ha), pending receipt by the contracted grower of their technical licensing for the additional area. This represents a doubling of PharmaCielo's currently active 1.2 million square feet (12 h) cultivation, making it Colombia's largest combined medical cannabis grower and processor.
"As our 30,000+ square foot advanced Processing and Extraction Centre facility nears the technical completion necessary for GMP certification, we have been steadily increasing utilization and expanding processing capacity with the appropriate technology, processes and volume expertise." said CEO David Attard. "With a biomass processing input capacity of 360,000 kg per year, it is the perfect timing for us to begin activating external cultivation contracts to ensure we have an established inventory of dried flower necessary to expand the output of finished extracts and meet increasing global market demand."
This immediate expansion of cultivation capacity will be dedicated to the cultivation and harvest of a non-psychoactive CBD dominant PharmaCielo proprietary strain. Contract growers are provided with PharmaCielo's proprietary strain cuttings for cultivation and harvest on a 12-week cycle, allowing multiple annual harvests. PharmaCielo's agreements with contract cultivators will allow it the flexibility to continue to expand based on need.
The initial external grower contract was granted to Tahami & Cultiflores S.A., an established horticultural grower led by PharmaCielo co-founder, former executive and director Federico Co*k-Correa. The agreement sets a series of obligations for the grower based on supply to PharmaCielo of specified quantities of plant material that come from the process of planting, cultivating, harvesting, pre-drying and de-stemming cuttings. The agreement also allows inspections of the grower verifying compliance with contractual protocols, cultivation and quality standards and conformity with government regulatory requirements and certifications.
"Our decision to grant the initial external cultivation to Tahami was a deliberate strategy to guarantee quality given the unparalleled experience held by Federico with commercial volume cannabis cultivation and the growing requirements of the PharmaCielo certified strains," added Attard. "Future contracts with additional growers will seek to replicate the same knowledge and experience."
The outsourcing contract supplements PharmaCielo's in-house cultivation operation in its Rionegro complex that will increase focus on growing psycho-active strains, while greater cultivation of non-psychoactive strains will be carried out by the external designated grower. All quality controls and supervision requirements of the off-campus cultivation will be done in accordance PharmaCielo's Good Agriculture Practices (GAP) and ISO9001:2015 standards.