VIDEO: Chemesis International Inc (CNSX:CSI) Expanding Latin American Plans

Chemesis International Inc (CNSX:CSI) is a new entry on the Canadian Securities Exchange, which began trading in July. The cannabis company is in a position to benefit from the new California regulations introduced on July 1 and is primed to increase the number of dispensaries carrying Chemesis products as dispensaries move toward compliance. Chemesis CEO Edgar Montero shares that the company will make an announcement soon about Latin American expansion and that Chemesis plans to build shareholder value in 2019 with real revenues. Chemesis recently raised $25 million in an equity financing with Alumina Partners and intends to use this investment to continue development.

Transcript:

James West:   Hey, welcome back to Midas Letter Live. My guess in this segment is Edgar Montero, the CEO of Chemesis International Inc., trading on the CSE under the symbol CSI. Edgar, welcome to our show.

Edgar Montero: How are you, James?

James West:   I’m great, thanks, how are you doing?

Edgar Montero: I’m fine, thank you. It’s a beautiful day.

James West:   Yeah. So you just started trading on the CSE on July 20^th, and tell me about what’s your business?

Edgar Montero: Well, obviously we’re in the cannabis industry, that is safe to say, and we’re very glad. We have been in the market for over a month now, and it’s been a great experience. We are based in Canada, but we have multiple assets in three different countries, so it’s very, very pleasing to be in this new era where opportunities, expansion and business, it’s all over the place.

James West:   Okay. So your focus is in California and Latin America?

Edgar Montero: Yeah. California, it’s our first asset; we have a facility down there, it’s a little bit more than 20,000 square feet, and we are about to start extracting 90 kilos of crude oil per day, which is very substantial, as our first asset. We also have another asset called Desert Zen, that it’s a fully compliant distribution company. Distribution, manufacturing and transportation company, and it’s been in the market for quite a few months now, and that’s very interesting because now we have the opportunity to start putting product into the dispensaries now that California is shifting to a new regulation, and this is pretty exciting for us. And we are doing great. It’s, as I told you, it’s a great, great opportunity to tap into the largest economical market in the world right now for cannabis, which is California.

James West:   Okay, so do you guys have dispensaries actually selling your products at this point, or not yet?

Edgar Montero: Yeah, we have a few. Remember that after July 1^st, there’s a lot of dispensaries that need to change into the new regulations. So we are catching the dispensaries as they start complying with the new regulations. So we are going to see a substantial increase not only on our revenues but in our presence in the following weeks.

James West:   So your products have been able to pass the sort of stringent testing requirements in California?

Edgar Montero: Yes. We have been doing this for a long time, not only in California but in other places with our partners. Remember that we have local partners that they have been pioneers in their markets, and they know what they’re doing; they’ve been testing their product for quite a few years now, and for me it’s an honour that they pick us as their partners, and that we have those products in the shelves right now.

James West:   I see. So the foundation of Chemesis was originally in the testing department.

Edgar Montero: Well, no, in the manufacturing department, the extraction. I think that our forte is extracting the cannabinoids from the plant and convert it into different products and medication, depending on the market that we’re looking at. Obviously in Latin America, now it’s going to be medicinal, the first phase, but what we are looking into tapping into a market that is humongous, is gigantic, and we’re very, very pleased to have this opportunity.

James West:   Yeah. So you’ve been acquiring incrementally more and more of SAP Global, and that is the brand name of your main product going into California to the dispensaries?

Edgar Montero: Well, that’s the company that we acquired, and they have multiple brands, California SAP being one of them. It’s multiple times awarded extraction brand; they have oils, they have ointments, they have multiple, multiple formulations, and we have been very pleased to work with them. They are top-notch, their quality is just amazing, and we kind of encourage all these awards; they have 26 awards in the past four or five years. So it’s very refreshing to have such partners in California that give us that name and can give us that trust in the consumers. And it overall has been a great experience.

James West:   Sure. Okay, so interesting, so you’ve got cannabis production in Puerto Rico; Desert Zen is, are they a grower of products or not a grower?

Edgar Montero: No, those are distributors. It’s a distribution company, manufacturing and transport. So remember that in California it’s very important to have the product from one place, put and or change it, package it, and then distribute it among the dispensaries. This is a market that’s been there for many years, and now they are just passing through new regulations, and we were able to tap into these new regulations and be one of the first movers after July 1^st.

James West:   Okay, then, so tell me about your Latin American expansion plans.

Edgar Montero: There is a lot that we’re doing in Latin America. I think that the market is there; there is more than – there is hundreds of millions of people in Latin America that are waiting on the green revolution to come to their countries, and we’re very pleased at having the experience and the relationships in Latin America to go through the regulation, get those licenses, and start the entire spectrum of business, from the cultivation, manufacturing and everything in between. Obviously we’re proud to have the relationship with local partners that are very important for us on our formula, because we need to be partners with people that has the credibility, that have the science behind it, and the overall moral compass to share their value that we have as a company.

We believe in integration, James. We believe in expansion. We believe that we are contributing a little bit to bring the cannabis industry a little wider, and bring the world a little bit closer to us, and that’s our mission.

James West:   Okay. What countries, specifically, in Latin America are you developing in now?

Edgar Montero: Mr. James, I want to be invited; I can’t give you all this news. If I spill the beans in our very first interview, you won’t invite me again.

James West:   [laughter] I see. Oh, it’s an embarrassment of riches situation; I get it. Okay, so you haven’t made any announcements in any country specifically in Latin America, is that what you’re saying?

Edgar Montero: We have been working very hard. Remember that Latin America, it’s a market itself, and you need to build a relationship. You need to do your due diligence very properly, because it’s a market that requires a very tight relationship, and this is what we’re working on right now. We’re going to make the announcement very soon and I hopefully I can give some of the announcements in your show. But that is coming soon, I promise that.

James West:   Okay, great, then Edgar, so what are the big catalysts that investors can look forward to in 2018 and into 2019 that are going to represent sort of shareholder value development?

Edgar Montero: Well, the most important thing for us, James, is to build shareholder value with real revenues, with real profits, with real assets that are growing exponentially as the markets increases. And you have this rampant growth in California, of course, but in North America, in Canada, and you are going to look at this rampant pace in Latin America as well. We are just tapping into a huge market; the world is now wide open, and I believe that countries are looking into cannabis as an answer of many things. Not only prices, but also economical development and many, many other things. So you will see a lot of the world in the upcoming year.

James West:   Okay. And then you most recently raised $25 million in an equity financing with Alumina Partners. Can you tell me about that financing? What price was it done at, what did the unit look like, what are the terms and conditions?

Edgar Montero: Well, this was a milestone. Obviously it’s very pleased to have in this early stage of our development, companies that are willing to trust in what we’re doing. So the terms of the deal, it’s we are taking tranches of $1 million at a time based on our needs, and we are just giving the equity as we have it that day. But most importantly for me is, we are now just in the beginning of our development, and I think this deal give us validation to continue doing what we do. We are very well capitalized at this point; we have control of our destiny at this point, and this is very, very refreshing for our shareholders because now the leverage is on our side, and this is very good for the company’s shareholders and the overall growth of our company.

James West:   Wow. Okay, sounds great, Edgar. I’m going to pay very much following with interest your development, and we’ll come back to you in a quarter’s time or so and see how you’re making out. Thanks for joining me today.

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Original article: VIDEO: Chemesis International Inc (CNSX:CSI) Expanding Latin American Plans

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