In a historic move, UzCanna Ltd, a subsidiary of Malta-based Melabis, has become the first company in modern times to import cannabis seeds into Uzbekistan legally. Planting of the first batch of seeds will begin in April 2023 at UzCanna’s farm in the Sardoba district of the Sirdaryo region in central Uzbekistan, with additional land set aside for cultivation as the seed bank becomes operational.
In a historic move, UzCanna Ltd, a subsidiary of Malta-based Melabis, has become the first company in modern times to import cannabis seeds into Uzbekistan legally.
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UzCanna to Build State-of-the-Art Facility
UzCanna, founded in 2018 by British entrepreneur Damon Booth, imported more than four million seeds of Fedora Auto, an EU-certified low-THC cannabis variety, after working with the government of the landlocked Central Asian country 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-square-meter greenhouse to create a seed bank with the goal of producing an additional eight to 10 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’s farm in the Sardoba district of the Sirdaryo region in central Uzbekistan, with additional land set aside for cultivation as the seed bank becomes operational.
Unmatched Prices Attract Buyers
According to Damon Booth, buyers have already made themselves known for the first harvest, with each plant expected to offer an abundant one-eighth to one-quarter kilogram biomass of CBD.
Included on the list of cannabis varieties certified for industrial cannabis cultivation in the U.S. and EU, Fedora Auto is an auto-flowering strain with less than 0.2 percent THC but can deliver up to 12 percent CBD.
It will help place UzCanna among the high-potential market players as it seeks to bring products to consumers at a fairer cost. Damon Booth expects CBD biomass to be sold in Europe at unmatched 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. It’s an exciting but nerve-wracking decision for us. This project is the largest and only project of its kind in Central Asia.
“Depending on the season, we will employ up to 200 Uzbek farmers annually. It is a difficult task to try to change the outlook of a country, but we are convinced that this is the right decision.
“The benefits to Uzbekistan, both economically and environmentally, will be potentially huge as we gradually increase our growing footprint year by year, look to develop our own finished products, and within two to three years expand our reach into Central Asia.”
Melabis has the potential to plant nearly 3,000 hectares – a footprint equivalent to a small city – to double its agricultural footprint each year until it reaches full capacity.
The growth in production, however, will be determined by how much seed the company can produce.
“It’s taken a lot of work to get to this point, but the fact that a conservative country like Uzbekistan has changed its laws to allow cannabis cultivation and now seed importation shows the rest of the world what they could do,” he said.
A Business-Friendly Development for UzCanna
Construction of the growing greenhouse is expected to begin in late January 2023 and last approximately six weeks. It will be located next to a dry milling facility, racks, and a test laboratory.
UzCanna’s location in Uzbekistan was motivated by the climate, low operating costs, and the fact that the country is booming commercially.
It brings legal cannabis cultivation back to a region with a long history with the plant. Many experts believe that the area covered by present-day Uzbekistan is where Cannabis Indica originated and where cannabis cultivation began.
The cultivation of cannabis plants is legal for state enterprises and scientific purposes, provided that the proper license is obtained from the authorities. In March 2020, Uzbek authorities legalized the cultivation of industrial cannabis with a THC content of less than 0.2 percent, provided that growers obtain a government license.
Booth said, “Our goal is to be the lowest cost, but highest quality bulk CBD producer for extraction companies. Our customers are extraction companies in Europe, and they are doing finished product extraction. 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 we’re going to charge.”
Key UzCanna Partners
UzCanna hopes to double its initial 500-hectare crop with the seed bank. “It all comes down to making sure we get enough seeds out of the greenhouse and into the ground,” he said.
Investors include two organic asset management companies and Daniel Petrov, a founding member and former vice president of Aurora Cannabis.
Petrov is one of a group of experts in their field who are working with Melabis to help the company expand into the European and Asian markets.
Other names include David Hyde, a compliance and safety expert; Adam Siskin, an accomplished financial modeler; Alexzander Samuelsson, a respected extraction chemist; agronomist Riki Trowe of the Ventura Seed Company; Stephen Jordan, CEO of ACP Farms; and Jordan Thomson, a global authority on facility development and operations.
It took nearly two years of negotiations with Uzbek authorities for UzCanna to make the legislative changes necessary for successful operations 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 understood our ambition, they knew the opportunity was too good to pass up.”
“This is a case where we finally got it right. And as the only company operating in this field in Uzbekistan, we are ahead of the game.”
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