Serious marijuana money is starting to show up in Uruguay.
Almost six years after the South American country of 3.4 million people legalized cannabis, investors are betting Uruguay can become an export hub for medical marijuana as the industry expands around the world.
Silverpeak Life Sciences Uruguay Inc, one of the largest companies in the country’s nascent medical marijuana industry, is in talks with investment bankers to raise US$35 million this year to quadruple production and build a larger extraction lab in 2020, according to chief executive officer and U.S. cannabis investor Jordan Lewis.
"Our planned and desired expansion would be about 25 tons next year and that should push us above US$100 million in revenue," Lewis said.
Cannabis investors have poured money into the U.S. and Canada, seeking to take advantage as easing marijuana regulations create a massive legal market for a drug that was demonized for decades. Meanwhile, Uruguay’s weed economy has been slow to develop, despite a significant head start.
Silverpeak’s wholly owned Uruguayan subsidiary, Fotmer Corporation SA, has asked cannabis regulatory agency Ircca to increase its annual production permit to 400 tons of cannabis flowers, he said.
The company will need to raise about US$150 million between 2020 and 2023, possibly from public capital markets or a “strategic alliance” with a larger corporation if demand for cannabis products warrants increasing flower production to that level, according to Lewis.
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