HEARTS, JOINTS, AND MINDS
TBY talks to Alvaro Torres, CEO of Khiron Life Sciences Corp., on leveraging Colombia's many natural strengths in cannabis cultivation, branding as a value-added pharmaceutical, and changing misconceptions.
BIOGRAPHY
Alvaro Torres is the CEO of Khiron Life Sciences Corp. He has over 15 years of executive experience in the Latin American market, including infrastructure projects and project finance, management strategy, team development, and mergers and acquisitions. He was previously head of business development for SNC-Lavalin, Colombia, and was instrumental in growing the company from two to more than 2,000 people in Colombia over the course of three years. He was also President of Gomez Cajiao, a 400+ people infrastructure engineering company in Colombia and has overseen the development of projects totaling over USD1 billion in capital expenditure. He holds a bachelor's and master's in engineering from Rensselaer Polytechnic Institute and an MBA from Georgetown University, selected in Beta Gamma Sigma Honor Society.What prompted you to enter this new business?
About two years ago, the government of Colombia started talking about introducing a new cannabis industry. When I saw that Colombia was thinking about becoming a global leader in medical cannabis, the potential was clear. We have an obvious low-cost advantage, optimal climate, large population, and know how to leverage our strengths to cultivate great cannabis. I wanted to know how to replicate this success in the cannabis industry. We recognized that we needed to become the best in the field; therefore, we began researching the market and developing a plan for how to expand. Our idea was to bring our strategy into the Canadian capital markets, because Canada thrives in this. There are now almost 80 companies going public, with a market cap of USD25 billion. We wanted to create a Colombian economy focused on Colombia's domestic market and then expand into Latin America and understand the industry so we could bring a safer form of medicine to the area. In February 2017, we started in Canada and have worked to expand market awareness about our activities. We are working to brand ourselves as a value-added pharmaceutical.
What were the biggest challenges you encountered?
The challenges have been great and many, and I am sure there are more to come. The greatest, thankfully, were not from the government, which has been supportive of the industry in terms of regulation. The greatest challenge has been changing misconceptions of cannabis. We need to build a company that more closely resembles a pharmaceutical than a cannabis company, and we have been trying to make the business community understand exactly what this business can be. Now, we are working on improving perceptions about these products among physicians. Another challenge has been getting investors excited about bringing capital to a Canadian company focused on bringing medical cannabis to Colombia. We have worked hard to improve perceptions of Colombia's past, and we are making headway.
What has been the strategy to attract investors in such a new and unique industry?
There are three categories for approaching investors. One is the cannabis market itself, which is growing significantly, and where there is a healthy appetite for investors. Because we are pitching cannabis in Canada, which is already growing significantly, we have a great leg up in terms of attracting investors. The second is the team. Our COO was an executive in supply chain and product development at Merck for 17 years, while our Chief Compliance Officer is the former DEA Chief of Pharmaceutical investigations. We have the best master grower in Colombia and staff fluent in both Spanish and English. The third is the level of market saturation for companies operating in Canada. There are too many companies in a limited market. We, on the other hand, have the right team with the right credentials and are operating in a market with great opportunity.
What is your commitment to developing a strong medical business in Colombia?
We are doing two things in this regard. The first is developing strong relationships with medical associations. This has taken a great deal of time and effort, because doctors are extremely concerned about the safety of their patients. We develop these relationships by highlighting the quality of our team and experience. In fact, we had a conference during which we brought together 400 physicians to begin educating them about the benefits of medical cannabis, which serves the purposes of the industry and doctors. By being the first company to engage with the medical community in this way, it allows us to become a leading brand and opens the way for other firms. Our second approach has been to form the first cannabis guild, the president of which is a respected executive. We cannot build a successful business on an empty street: we need a thriving community of companies to develop a new industry.
HEARTS, JOINTS, AND MINDS
TABLE OF CONTENTS
Guest Speaker
François-Philippe Champagne, Minister of International Trade, Canada
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Juan Gabriel Pérez, Executive Director, Invest in Bogotá
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Patricia Tovar, Executive Director, Colombian British Chamber of Commerce (Britcham)
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Orlando Velandia Sepúlveda, President, Agencia Nacional de Hidrocarburos (ANH)
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Diego León Vélez Velásquez, General Manager, Ingeniería y Gestión Administrativa (IGGA)
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Iván Herrera, Vice President , Business Solutions and Government of Huawei Colombia
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Andres Hernandez, General Manager, Mareauto Colombia S.A.S,
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City of Gold
Colombia's regulatory policies are generally regarded as welcoming to foreign investment, as seen by the World Bank's 2018 Doing Business report, which ranked the country's business environment 59th globally. Chief among the country's appeal to foreign investors are its stable political and economic system, rich natural resources, and geographically important location at the crossroads of two oceans and continents.
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