Khiron (KHRNF) is a cannabis company specializing in THC and CBD manufacturing and distribution in Latin America and Europe. With 15 health centers across the globe, they position themselves as a wellness company. But Is KHRNF a Strong Buy and Hold?
Khiron Life Sciences Corp is a THC and CBD company with small agricultural footprints. They distribute and sell products in Latin America and Europe with sales locations rolling out in Mexico this year. If they can take advantage of these emerging markets, it could be very big for them. They are much less competitive than the USA or Canada is for shelf space.
Khiron mostly has oils and flower products for sale currently but they are looking to expand that asap. Their largest market by far is Colombia, which is all their cultivation and manufacturing is located. Their sales are increasingly due to the cannabis flower though.
Bottom Line: Is KHRNF a Strong Buy and Hold?
The revenues have been increasing QoQ but they remain small ($3.5 million in Q3 2021). Recent quarterly financials show they are not profitable yet, with net losses around $3.34 million and EBITDA at negative $3.78 million. Their recent fundraising through share sales, has their cash and cash equivalents at $15.4 million which is enough for the next year or so plus a small acquisition if they so desire.
With flower sales driving their growth, it is a good sign that the flower margins are high, at nearly 85%, given the cheap cost to produce in Colombia. Increasing their footprint in Mexico, could be huge, as Mexico is the clear leader of the LatAm marketplace in terms of cultural influence and financial position. They are still too small and risky for us, but could be an acquisition target of any large company looking to expand their sales teams internationally. This is maybe a few years out though.
For all these reasons we rate KHRF as a Weak buy and hold stock.
Is KHRNF a Strong Buy and Hold?
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