Cannabis company Kaya Group has entered into a licensing agreement with Quantum Ventures Holdings Limited to open two locations in Uruguay by next January.
“They have currently spent US$1 million on capital expenditure build-out with over 50 employees hired and 40 indirectly currently working on the project,” Bali Vaswani, chairman and chief ganja officer of the Kaya Group, told the Financial Gleaner.
Kaya was the first operation to venture into the retailing of medical marijuana in Jamaica, starting with one herbhouse in Ocho Rios. Balram now operates three herbhouses in different parts of Jamaica, and is also exporting marijuana to the Cayman Islands.
Vaswani says the company aims to replicate its home-based model under the franchise arrangements, which it plans to roll out in different regional markets over time.
Kaya Group operates its own farm to produce raw materials for the products sold in its herbhouses. Kaya will not export any cannabis to Uruguay but will supply smoking accessories, paraphernalia and apparel to the franchisee. Other products will be made under licence in South America.
Uruguay was the first country in South America to legalise cannabis in 2013.
“We feel that our business model of building and operating our flagship locations locally, while building a brand that can extend itself through franchise and licensing opportunities globally, will introduce Kaya to a more diverse number of patients and consumers that will maximise shareholder value,” Vaswani said in a statement regarding the franchise deal.
Quantum said in the release that it is planning a grand opening of Kaya Herbhouse in Punta Del Este by December, and expects the second location to be completed by January 2021.
“Over the past three years, we have worked within the Jamaican music and creative space, and we feel they have the same philosophy on brand values, sustainability and environmental practices while maintaining the highest Kaya standards in regard to their ganja and ganja-related products,” said Chairman of Quantum Arturo Rubinstein.
The herbhouse will offer separate sections for the marijuana dispensary, pizzeria, bar and café.
Kaya, a Jamaican company, is spreading its wings in and outside of Jamaica at a time when early mover companies based in Canada, such as Aphria, Aurora and The Green Organic Dutchman, are disinvesting in Jamaica, due to lower than projected revenue that was exacerbated with the onset of the COVID-19 pandemic.
In 2018, the Kaya Group shelved plans to raise funds publicly on the Toronto Stock Exchange through an entity named Buzz Capital, choosing instead to use other methods for raising cash.
“We had terminated our transaction with Buzz Capital based on a mutual consent between both parties that it would be better for Kaya to partner with one of the larger multi-state operators in the USA or larger licensed producers in Canada, as it would complement our growth strategy internationally and in the USA, where the greatest demand is for our brand and products,” said Vaswani.
He added that the onset of the pandemic would most likely have negatively affected its stock price, as it did for most public companies.
“We raised funds from family and friends, in terms of debt and equity,” he said.
