In a historic move, UzCanna Ltd, a subsidiary of Malta-based Melabis, has become the first company in modern times to legally import hemp seeds into Uzbekistan.
The company, founded in 2018 by British entrepreneur Damon Booth, has imported more than four million seeds of Fedora Auto, an EU-certified low-THC hemp variety, after working with that country’s government landlocked in Central Asia to facilitate the process.
The $33 million investment, spread over five years, will also allow UzCanna to build a state-of-the-art 10,000 m² greenhouse to create a seed bank with the aim of producing an additional eight to ten million seeds.
Planting of the first batch of seeds – supplied by Ventura Seeds – on approximately 500 fully secured hectares will begin in April 2023 at UzCanna farm in the Sardoba district of Sirdaryo region in central Uzbekistan, and d Other land will be set aside for cultivation as the seed bank becomes operational.
Unmatched prices
According to Damon Booth, buyers have already come forward for the first harvest, with each plant expected to offer an abundant CBD biomass of one eighth to one quarter of a kilogram.
Listed as a certified hemp variety for the cultivation of industrial hemp in the United States and the European Union, Fedora Auto is an autoflowering variety with a THC level of less than 0.2% but which can provide up to 12% CBD.
It will help place UzCanna among the players in the market with high potential, as it seeks to bring products to consumers at a fairer cost. Damon Booth expects CBD Biomass to be sold in Europe at unparalleled prices.
Speaking to BusinessCann from Istanbul, Booth said: “This gives us a head start in Uzbekistan, where we are currently the only company operating in this field. This is an incredibly exciting but at the same time nerve-wracking decision for us. This is a large-scale project, the largest and only project of its kind in Central Asia.
“Depending on the season, we will employ up to 200 farmers per year. It is a difficult task to try to change the outlook of a country, but we are convinced that it is the right decision.
Damon Booth
“The benefits for Uzbekistan, both economically and environmentally, will be potentially enormous, as we gradually increase our cultivation footprint year on year, seek to develop our own finished products and, within two or three years, we will expand our reach in Central Asia. »
Melabis has the potential to plant nearly 3,000 hectares – a footprint equivalent to that of a small town – with the aim of doubling its agricultural footprint each year until it reaches full capacity.
Growth in production, however, will be determined by the amount of seed the company can produce.
“It took a lot of hard work to get here, but the fact that a conservative country like Uzbekistan changed its laws to allow the cultivation of cannabis and now the import of seeds shows the rest of the world what they could do,” he said.
Business-friendly boom
Construction work on the cultivation greenhouse is expected to begin at the end of January 2023 and last approximately six weeks. It will be located next to a dry milling facility, racks and a test laboratory.
UzCanna’s move to Uzbekistan was driven by the climate, low operating costs and the fact that the country is booming in business.
It brings the legal cultivation of hemp back to a region that has a long history with this plant. Many experts believe that the region covered by present-day Uzbekistan is where Cannabis Indica appeared and where hemp cultivation began.
The cultivation of cannabis plants is legal for state-owned enterprises and for scientific purposes, provided you obtain the correct license from the authorities. In March 2020, the Uzbek authorities legalized the cultivation of industrial hemp with a THC content below 0.2%, provided that growers obtain a license from the government.
Booth said, “Our goal is to be the lowest priced yet highest quality bulk CBD producer for extraction companies. Our clients are extraction companies in Europe, and they extract finished products. We want to be the wholesale supplier of this product. »
“Right now these extraction companies are going to the Balkan countries – Lithuania and Poland – and Bulgaria and they’re probably paying twice as much for a lower percentage of CBD than what we’re going to charge. »
Key associates
UzCanna hopes to double its initial harvest of 500 hectares thanks to the seed bank. “It all comes down to making sure we get enough seeds out of the greenhouse to put them in the ground.”
Among the investors are two bio-asset management companies and Daniel Petrov, founding member and former vice president of Aurora Cannabis.
Mr. Petrov is part of a group of experts in their field who are working with Melabis to help the company gain a foothold in the European market and in the Asian market.
Other names include compliance and security expert David Hyde, accomplished financial modeler Adam Siskin, respected extraction chemist Alexzander Samuelsson, Ventura Seed Company agronomist Riki Trowe, Stephen Jordan, CEO of ACP Farms, and Jordan Thomson, global authority on facility development and operations.
It took almost two years of negotiations with the Uzbek authorities for UzCanna to make the legislative changes necessary for the success of its activities in the country.
“Our competitors are Africa, China and Colombia in terms of costs. No one can do business in China, in Africa there is too much corruption and too many headaches, and in Colombia it is the same. »
“Yes, we could have given up and gone elsewhere, but when the Uzbek authorities saw our ambition, they knew the opportunity was too good to pass up. »
“This is a case where we finally got there. And as the only company operating in this field in Uzbekistan, we are ahead of the game.”
