Sign up Australia
Proactive Investors - Run By Investors For Investors

Kaneh Bosom Biotechnology: experienced management, access to capital and a clear strategy paves the way for success for the cannabis company

The company says access to capital and a clear strategy will help it succeed
Kaneh Bosom Biotechnology: experienced management, access to capital and a clear strategy paves the
There is huge potential as the cannabis revolution takes hold internationally, according to Kaneh Bosm Biotechnology

You need certain key ingredients to successfully grow a business from the ground to the point where a buyer might pay a premium for it.

Luck is always near the top of the list – Napoleon’s ‘give me a lucky general’ maxim applies as much in business as it does in warfare.

However, there are a number of other attributes that, if missing, doom a company to failure.

READ: Kaneh Bosm BioTechnology announces listing on US OTC market

An experienced management, access to capital and a clear strategy that plots a course to the exit are three.

None of those work if there isn’t also a viable market; though the ideal is to target an arena where competition is low and the barriers to entry high.

In Kaneh Bosm Biotechnology (CSE:KBB, OTC:KNHBF), these ingredients are there in abundance.

Fragrant cane

The name first. Literally translated the first two words mean 'fragrant cane' and come from the Old Testament reference to cannabis in Exodus 30:23.

So no prizes for guessing, KBB is a cannabis company.

But unlike the giants of the industry such as Aurora and Canopy Growth, it wants to expand outside North America.

Its transformation in the last eight months reveals it is already part-way to realizing its ambition as it now has operations in Europe, South America and Africa.

In all, it has six discrete units that make it a vertically integrated ‘seed-to-sale’ operation.

Marathon Globa has an exclusive agreement with Cosmos Holdings

Through subsidiary Marathon Global it has an exclusive agreement with Cosmos Holdings, a European pharmaceutical distributor that gives KBB access to 35,000 pharmacies in 16 countries.

EU Cannabis Corp, meanwhile, has a 90% interest in industrial hemp licences held by Cannatec Greece.

This allows it to cultivate, manufacture, distribute and export industrial hemp and its many cannabidiol (CBD) derived extracts.

CBD applies different qualities

For the uninitiated, CBDs are the inert, non-psychoactive compounds derived from cannabis, which are distinct from THC, which gets you high.

CBD cannabinoids are prized for their manifold medicinal qualities including pain relief and anxiety suppression.

Lucas Birdsall, a long-time adviser to the company, thinks CBD opportunities are just the start in Greece. It has applied for a medicinal cannabis licence there.

He describes Greece as the “gateway to the EU for KBB”.

Another way to look at it is as an option on the liberalization of cannabis laws in Europe.

“Eventually, as they come around to legalization across the EU bloc we may be able to parlay what we have into medicinal or recreational cannabis supplies,” says Birdsall.

Farmakem, is key to the portfolio

Key to the portfolio, too, is Farmakem, a revenue-generating licensed medical cannabis company based in Slovenia. “It works mainly on the R&D side,” says Birdsall. “It will complement our supply arm.

In CanAfrica Holdings, KBB has planted its flag in Africa with a Lesotho-based low-cost cultivation operation that can also manufacture, supply, hold, import, export and transport cannabis and derivative products.

The CSE-listed company is in Latin America via a mirror image business in Colombia called Cannabis Medical Group SAS.

We touched on the firm’s unique selling points earlier, but it’s worth understanding just what will propel this growing enterprise along the road to success in the coming months and years.

Management is key. Eugene Beukman, Michael Martinz and Brendan Purdy represent a strong and experienced leadership that will oversee the company’s buy-and-build strategy.

Birdsall points out that the company’s founders were behind one of Canada’s largest cannabis streaming deals, so there is plenty of industry knowledge there too.

Financial backing is also on tap with the group raised around $10mln thus far.

This brought in a number of savvy hedge funds, including MMCap International, which was an early investor in success stories such as Aurora, Canopy and Cannabis Wheaton.

New frontier for cannabis

Of the group of investors behind KBB, Birdsall says: “They are quite experienced at both understanding the next frontier of cannabis as well as understanding the licences we have assembled to date.
“They recognize the ambitious nature of KBB’s seed-to-sale objective. They are going to allow us to raise materially larger amounts of capital going forward.”

Mentioned earlier, the strategy is to buy, build and ultimately sell. A recent spate of transactions that’s brought the business this far is just the start of the corporate activity.

Birdsall reveals there are deals in the pipeline that management hopes will come to fruition in the coming weeks and months.

In fact, there is no shortage of businesses lining up to work with KBB. “We have access to the capital the founders don’t have and we’ve also run public companies,” says Birdsall.

He thinks there is huge potential as the cannabis revolution takes hold internationally. “We want to be part of that,” he says.

But ultimately it is also about the exit and handing the company on to a buyer who can take the KBB to the next level, he adds.

“We view ourselves as a very attractive take-out target for an enterprise model licensed producer.”

Join our Crypto, Blockchain and Cannabis Telegram group here
View full WRLD profile View Profile

ICC International Cannabis Corp. Timeline

Related Articles

1539364967_Cannabis-plant.jpg
October 10 2018
Management behind ICC International Cannabis Corp has a clear buy, build and sell strategy
cannabis
August 28 2018
Tidal Royalty provides capital to help grow licenced US cannabis firms in exchange for receiving a percentage of future top-line revenues.

No investment advice

The information on this Site is of a general nature only. It does not take your specific needs or circumstances into consideration, so you should look at your own financial position, objectives and requirements and seek financial advice before making any financial decisions. You acknowledge and understand that neither the Company, its related bodies corporate, the information providers or their affiliates will advise you personally about the nature, potential value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter. You should read our FSG and any other relevant disclosure documents and if necessary seek persona advice prior to making any investment decision.

You understand and agree that no Content (as defined below) published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person.

You understand that in certain circumstances the Company, its related bodies corporate, the information providers or their affiliates may have received, or be entitled to receive, financial or other consideration in connection with promoting, and providing information about, certain entities on the Site and in communications otherwise provided to you.

You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate. From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

Before you act on any general advice we provide, please consider whether it is appropriate for your personal circumstances.

© Proactive Investors 2018

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use