Vicente Fox’s Firm Eyes Latin America as Region Opens to Marijuana

(Bloomberg) -- Former Mexican president turned drug-legalization activist, Vicente Fox, sees a paradigm shift in Latin America as governments authorize marijuana use, embracing a drug that was once shunned.

Now, as markets open in a region of more than 640 million people, Fox wants the Canadian company he represents to supply the weed.

Khiron Life Sciences Corp., which Fox joined as a board member and adviser in 2018, is set to launch sales throughout Latin America this year, Fox said. The Vancouver-based company, which is already selling products in Colombia, is entering into a joint venture with Colorado-based Dixie Brands Inc. to market a line of medical products, using marijuana cultivated in four countries in the region.

“We have a new world,” said Fox, president from 2000 to 2006, in an interview in Colombia, where Khiron operates a cultivation site. “It’s surprising for an activity that was in the hands of criminals, illegality and the underworld. The paradigm has totally changed.”

The companies will face stiff competition. Global marijuana firms are vying to gain a foothold in Latin America, where governments have moved quickly to legalize cannabis for medical purposes. Ten governments in Latin America and the Caribbean have passed legislation, while Mexico, a country of 126 million, appears poised this year to legalize the drug for recreational use, following Uruguay, which legalized it last year.

Medical cannabis sales in the region could top $15 billion by 2025, according to an estimate by BMO Capital Markets published last year. An industry-funded study by Prohibition Partners published in October said the market is expected to exceed $12 billion by 2028.

Governments are still establishing laws in several cases to regulate production and sales of marijuana. Khiron is working across the region, including in Brazil, to establish itself even as regulations are finalized, said President Chris Naprawa. Partnering with Dixie will help Khiron “build a moat,” he said.

Under the 50-50 venture, Khiron will supply the product, gain regulatory approvals and licenses in Latin American markets. Dixie, which sells a range of cannabis-infused products across the U.S., will supply the formulas and brands, said Dixie CEO Chuck Smith. He declined to say how much the deal is worth.

After the venture was announced Wednesday, Khiron shares gained as much as 25 percent in Toronto trading to their highest level since 2013, before paring some of the gains. Dixie soared nearly 14 percent.

To contact the reporter on this story: Ezra Fieser in Bogota at efieser@bloomberg.net

To contact the editors responsible for this story: Courtney Dentch at cdentch1@bloomberg.net, Sebastian Silva, Kristine Owram

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