Dr. Patricio Stocker PhD joins Matthew Kind to discuss why his company PharmaCielo is growing cannabis at the equator in Colombia for export to the rest of the world. Why not grow cannabis in an ideal environment where indoor lights aren’t needed and water is abundant?
Be sure to tune into this episode to understand how the international trade of legal cannabis is unfolding.
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[1:10] – Dr. Stocker talks about his background
[2:19] – What is PharmaCielo
[5:10] – The government regulatory system in Colombia
[6:58] – The growing environment in Colombia
[11:14] – How the political & crime situation has improved in Colombia
[15:55] – Leveraging Colombians experience with flowers and coffee
[20:16] – What countries does PharmaCielo export their product to
[22:37] – Where the cannabis market is headed the next five years
[26:30] – Environmental standards that PharmaCielo adhere to
[30:47] – Dr. Stocker answers some personal development questions
[38:40] – Contact details for PharmaCielo
PharmaCielo, a Canadian company, is looking to leverage the abundant sunshine, and ideal growing environment in Colombia to bring affordable, high-quality cannabis to other markets. Here to tell us more about it is Dr. Patricio Stocker, President and CEO of PharmaCielo. Dr. Stocker, welcome to CannaInsider.
Dr. Stocker: Thank you very much Matt, I’m very happy to be here with you today.
Matthew: Before we dive into PharmaCielo, can you give us a little background on yourself and your experience and your education and how you came to be part of PharmaCielo?
Dr. Stocker: I was born in Argentina and raised there and studied later on in Switzerland. Then I worked for more than 15 years in the automotive industry, most of the time at Daimler running brands like Mercedes Benz in Colombia and Latin America in general but also in Europe. And one day a very, very good friend of mine came to me, like three years ago, and explained to me this unique opportunity. And that’s the way I got to PharmaCielo, in a very probably unconventional way running corporations, running companies that were present around the world. But I decided a time ago to make a complete switch to the cannabis industry, which I think is the biggest opportunity for the years to come.
Matthew: Can you describe a little bit on a high level what PharmaCielo is,for listeners that may have heard of your company but aren’t exactly clear on all the details?
Dr. Stocker: Yes, PharmaCielo is a Canadian-founded company but with a total Colombian operation, and our focus is in processing flower into oil for the global market. So we’re not focusing on certain markets. We’re focusing on the world, and we’re aiming to become the world’s leading supplier of naturally produced standardized, medicinal-grade cannabis oils and extracts. For this we have a unique concept, and you already mentioned it in the introduction. And we want to produce all natural cannabis. Premium quality with the lowest possible cost, high yields in a scalable way.
Our project is completely scalable over time, environmentally friendly or sustainable and also socially inclusive. It sounds like it covers everything, but it’s a reality. Why do we say we have a premium quality? First of all, the premium quality... you know, Colombia is known for its strains in cannabis and the climate really allows us to use different micro climates so we will be able to get the best quality strains in a natural environment. And the low cost is possible due to the technology, let’s call it the technology of the Colombian flower growers that already are one of the biggest and most important in the world. And this also allows us to scale the project very very easily with a contract grower model.
Finally, the nature and the natural environment of Colombia really gives us a last push which allows us to be completely environmentally friendly in a very sustainable project. I could go deeper on this if you want. But the last point, which I think is also very, very important for us, Colombia is in this moment in a peace process and there are many people who were struck by the conflict and also by the war on drugs. And for this reason, we also set up a solution to be completely socially inclusive and to make in certain regions, the most struck regions in the country, those people our partners.
Matthew: Yes, and there’s still that when people think of Colombia they think of FARC or Pablo Escobar, and I want to get to that in a minute. But in terms of what kind of regulatory approval you have from the government of Colombia, can you tell us a little bit about that, what kind of licensure or what they’ve given you, how you can operate there?
Dr. Stocker: Yes, yes. The Colombian licensing process is a three stage approval process. You need to have an extraction license, an oil production license. You need to have a cultivation license and an export license. We as PharmaCielo are the first company to receive this first extraction license, so we’ve completed the first stage and we’re very, very close to get the second stage. What is important also to mention that Colombia’s law is completely ready for this new market, and it focuses only on oil extracts. So by Colombian law you won’t be able to sell any flower or to commercialize flower. Everything is focused on medicinal grade oil.
Matthew: Medellin-and you’ve mentioned a little bit about Colombia, and in my mind’s eye until I had been there over the summer, it’s pretty close to the equator so I was picturing more kind of high humidity and very difficult to get around, kind of tropical environment. I think it is that way by the coast but Medellin, where I was and where your South American headquarters are, they call it the Land of Eternal Spring because it’s this high altitude, even though it’s on the equator, and it’s kind of somewhat gifted in terms of where it’s situated in the world. Can you tell us a little bit about that and the kind of environment where the cannabis is actually grown, and is it indoor or outdoor and that type of thing?
Dr. Stocker: First of all, we are developing different micro-climates, or the production in different micro-climates. We want really to take advantage of all those native strains in Colombia and all of the best strains around the world to adapt them in the best way to the Colombian environment. What do I mean with this Colombian environment? For example, you have been in Medellin and we’re very close to Medellin, closer to the airport in Rionegro, which is around 2,000 meters altitude, so this is our first environment that we have.
The second one is in Cauca, which is the biggest cannabis-growing region probably in the world, as of today. And there we have an environment around 1,000 meters. We’re also developing other projects at close to sea level, around the 100-400 meters altitude. So we want to really, over time, take advantage of all these possibilities that Colombia gives us through its natural environments. For this we’re going to use open-air greenhouses. The open-air greenhouses are the methodology that flower growers in Colombia use to produce their flowers.
In those-open air greenhouses we have a possibility to control the climate in a natural way, in a very cost efficient way. So simply by opening or closing those greenhouses by using some basic ventilations systems, which make much, much easier the climate control in general. And of course, in all those places taking advantage of the 12-hour light cycle, of natural water sources. So this is the basic concept that really allows us to get this premium quality at a very cost competitive level.
Matthew: Yes, and I mean, that’s part of what PharmaCielo sees is that eventually this is going to come down to economies of scale and the ability to produce massive volumes while controlling the cost of your inputs. So you’re making a big bet now, that’s where the market is headed. Would you say that’s accurate?
Dr. Stocker: I would add to this. I think it’s accurate that we’re trying to really develop the most cost efficient concept, but it’s really focused on a natural growing process. It’s really focused on an environmentally friendly-that will be our biggest differentiator together with the social inclusive model. So I think around the world there is produced cannabis in probably locations which aren’t natural locations to produce cannabis. For example, you don’t produce in the Northern Hemisphere bananas or mangos, but you produce cannabis. And this is the natural environment where we really can produce with no energy cost or very low energy cost, and this is the big differentiator that we have.
Instead of using energy from the grid, we use the sun. Instead of using water from the tap, we use the water from natural sources. We have a system that collects all the water from over our greenhouses and in natural ponds and this really allows us to make the biggest differentiator and the biggest impact with the lowest possible footprint.
Matthew: Nows you mentioned you’re originally from Argentina but can you give us just a quick rundown of what the lay of the land is like in Colombias because a lot of people listening they’re watching “Narcos” on Net Flix and they’ve heard of Pablo Escobar even though he’s been dead for quite some time, or hear about the dangers of FARC. Can you just touch on a couple of those things and then maybe talk about how Colombia has evolved in the last 20 years or so?
Dr. Stocker: First of all, I had the same impression when I first came to Colombia over 20 years ago, and yes, Colombia has or had this image combining guerrillas, drug lords, etc. This is probably not the good side of Colombia. But if you take the real facts, Colombia is one of the most stable economies in Latin America. Colombia is probably the only or one of the few countries in Latin America without a military government in the last 60 years.
Colombia is the only country, as far as I can recall, which had stable growth around 4.5% every year plus/minus 2 percentage points. So there are many things that make Colombia an ideal investment spot in Latin America, with good laws that protect foreign investment and with a big focus in trade and opening the country. Colombia signed FTAs with the United States, with Canada, with the Latin American and Central American countries through Mercosur, the Caricom countries, with Europe. Colombia is trying to negotiate for years with Japan. So Colombia is really open to the world and wants to grow. Colombia is very, very well logistically positioned between the two oceans, very close to North America.
So there are many, many benefits around Columbia.
When we first started this project we really had two clear visions to develop this project and the first vision was we want to transform, or help to transform, the image of Colombia which comes from a legal drug image country. Everything that you mentioned, all the Netflix series, etc., that show really this illegal drug country to a medicinal drug country. This will take several decades to change this because it’s the first thing everybody knows about Colombia and what comes to its mind.
The second really big vision of us is to develop a complete new industry that is made based on the natural advantages that Colombia has. But this is the general situation. The peace process the FARC, I think this is something very, very positive for the country. Colombia, from my point of view, was always like two Colombias. You had a very safe Colombia, a country where doing business was-you could do it in the normal way like in any other country in the world, and a part of the country which was not so normal, which was not so safe in this way and what is making this peace process in Colombia.
That you will have a Colombia that is united as a safer place again, developing with people who are really are tired of this conflict that took over more than 50 years. So I think the outlook is very, very positive for Colombia at this moment. Even President Santos got the Peace Nobel Prize some months ago as a recognition for this big effort of the Colombian people to change the situation of the country and to change also the general image of Colombia.
Matthew: Yeah, that’s great. I’ve heard a lot of positive things about Santos and what he was able to accomplish. I mean, that’s incredible, because this conflict with the guerrillas has really been… it seemed like it may never be resolved, so it was really miraculous that that was able to come to pass. The Colombians are no strangers to growing agricultural crops like coffee and cut flowers. Have you been able to parlay the agricultural skills of people down there over into cannabis, or I should say commercial cannabis? Have you seen a lot of carryover of skills and so forth?
Dr. Stocker: Yes, yes. First of all, Colombia is a country with an extreme or an incredible bio-diversity. If you take a look at what all kind of fruits that the country has it’s really incredible, but there are the main traditional industries, as you know, our coffee and cut flowers. And in cut flowers Colombia is one of the biggest players in the world with 70% of all the cut-flower market is being… or 70% of all the cut flowers in the world come from Colombia. Seventy-five percent of all cut flowers imported to the United States and Canada come from Colombia. So Colombia is very, very competitive due to a combination of nature and special skills that were developed and all the logistics that the Colombian flower industry developed here.
And here we see that as PharmaCielo we can, and as a new industry, we really can take advantage of this. You have really skilled people there, knowing how to work in the flower industry and cannabis is a kind of a chrysanthemum. With Colombian, in one of the regions where we are going to produce, 90% of the chrysanthemums of the United States come from this region. So we have those skills and this will be very, very helpful to develop the business. Trained people on the workers’ level but also trained people on the agronomists level, the way you build greenhouses. So all the infrastructure already exists and finally, we’re changing the flower.
Matthew: I saw some picture of greenhouse on your website. So you’re saying this is just a matter of taking greenhouses in Colombia that have already been used for the cut flower industry where the cut flowers are grown and then a lot of them shipped all over the world, but mostly to North America. You just pretty much take those type of greenhouses and growing environments and get them close to natural water supplies and grow at different altitudes, anywhere from 6,000 feet, I think you said, down to 1,000 feet, and you’re going to do that all over Colombia.
Dr. Stocker: It’s not as simple as you’re saying it but the basic concept is correct. What do we need to do? We are setting standards. PharmaCielo’s wanting to set standards in an industry that is evolving and an industry that is growing and developing. So we are part of the creation of this industry in Colombia. And, of course, we’re taking advantage of all this knowledge but we’re building the greenhouses in the proper wa,y adapted to what we need. We need also to comply with all the government regulations.
So the first hurdle is to get all those licenses and the next role is really also to ensure all the security you need to put on those facilities. It’s not simply using a greenhouse. You’re building using Colombian regulations. Let’s call it a high-security tract where you are not allowed to lose any of what you’re producing, any of the flowers and you also need to have a complete tracking of all the process. So it’s not as simple but the basic concept of taking advantage of this knowledge, adapting it to the cannabis industry is correct.
Matthew: Now, after the flower is grown in Colombia and I’m assuming you’re going to export it to Canada, but not exclusively? Are there other countries on the list where it will be exported to?
Dr. Stocker: We are focusing on the world. We are not focusing on Canada. We’re a Canadian/Colombian company. Our operations, as I said, are fully in Colombia, but we’re focusing on the world. We want to sell to every country in the world where it’s legal to sell cannabis oils and where it makes also sense for us from a business point of view. What do we see? We see the first market for us will be Colombia, then the rest of Latin America. The biggest focus there is Brazil because of the size, but we won’t leave countries out if it makes sense there.
Then, of course, we want to focus on Canada, on Australia, on South Africa and Europe. And every week I receive contacts from people around the world from countries that are evolving in a medicinal market and the health market that are approaching us to evaluate possible, distribution agreements. And so, again we are a Colombian/Canadian or Canadian/Colombian company, but we are focusing on the world. All these facilities and the extraction plant is going to be built to focus on the world cannabis market.
Matthew: That’s fascinating. It really is. How do you see the market for cannabis flower changing and maturing over the next three to five years? I mean, you’re taking probably the most comprehensive international approach that I’ve seen so far. There’s maybe just one or two others that really kind of have this big global vision on how the cannabis trade will operate, but even those competitors don’t have the ability to grow at the equator right now quite like you. So you’re in a good position I think, ideally. And your opinion of where the market is going is probably different from smaller producers, but I’m curious to hear what you think is happening and where you think the market will be three to five years from now and what PharmaCielo will look like then.
Dr. Stocker: The first thing that we see, and just is one of the basic parameters of our business plan, is that we will have a very strong regulated market. The market will become highly regulated in cannabis. We have a tendency of legalizing use of cannabis for medicinal and other purposes around the world, but this will become very, very highly regulated. So today, as of today, what do we see? We see even in developed countries that the consumer has no real guarantee of what he’s buying. What can be assured what he’s really getting for kind of a product? Maybe he’s using it for a medicinal purpose, but there are many side effects of pesticides, of other problems that…t the cannabis as it’s grown today that you’re not sure.
So on one side we see that we’re in a moment like we had many years ago when alcohol moved from prohibition to a legal market. And during Prohibition, there were no standardized products, there were no clear product definitions so everyone bought what was on the market. This is something that in some countries in the world can be seen also. And here I see clearly a shift that will go to a very very regulated market. And for this, PharmaCielo is prepared. We see, maybe you saw our board members that have this high experience coming from tobacco industry, coming from areas like the World Medical Association, that come from pharmaceutical companies. So we have a team of people that know how to handle this.
And for this is what we are preparing us for the next, as you said, three to five years where we see a highly regulated market and a market that will be very, very much controlled. And for this reason, we are also preparing PharmaCielo to become the leading supplier of standardized medicinal grade cannabis oil extracts. And our project, really, PharmaCielo, I always compare it with building the biggest surfboard so when the wave, the real big wave comes that we are ready. We want to have this biggest surfboard of the world so when this legalization of cannabis wave really is here we are ready to take it. And as of today, for example, we’re in the middle of a financing round, just preparing us for the next steps, where we have investors from around the world that really are as convinced as I am of this unique concept of PharmaCielo that will change and shape the cannabis industry in the future.
Matthew: I know it’s a focus of the company to maintain high environmental standards. Can you give us a little more detail about that? I know you have the greenhouses, and that’s definitely a way to save on electricity, but is there anything else you’re doing in terms of specifics that you would say emphasize sustainability?
Dr. Stocker: Now, this is a very, very interesting question and again, this is I think our biggest differentiator that we have compared with other cannabis companies. The central point here in the environmental issue is what you mentioned, the low energy cost or really no energy cost. But we are also using or planning to use for all the pests and all those problems, all natural products. For example, we are growing special crops outside of the property that trap certain insects.
We’re using kind of vacuum cleaners that can trap the insects you don’t want that can be a problem, but release the insects that you need for a natural environment. This is what makes our product really completely natural on this side. In some weeks, we are participating in a study that is being performed by the Global Footprint Network. This is a company based out of Zurich. They are the specialists in measuring global footprint, or the footprint of agricultural production activities and other activities, and they are comparing different ways how to cultivate and harvest cannabis. And so we’re comparing our model with a model in the northern regions, let’s say California, let’s say Colorado, let’s say Canada, let’s say other places in the world, and I don’t have still the results, but the first comments that we expect that it may be several hundred or several thousand times of difference on the footprint.
Why? Why is this the key issue? Because yes, you can have energy, you can have water, and this is clear, what I was seeing that using the pesticides and other maybe unnatural ways how to produce cannabis, this makes the biggest difference. I always say we are producing with open-air greenhouses in a natural environment, and in other places in the world it’s like producing on Mars or like producing on the moon because you have a closed environment, you have to generate the climate of a tropic, subtropic area with energy. You have then to try to handle all kind of pests, diseases in a closed environment.
So it’s not that we are much more intelligent. It’s simply we have a much simpler environment and natural environment. And I say again, how many of these people produce a certain part in the north or in the south of the planet, bananas or mangos or even flowers. You don’t do it. And this is the biggest differentiator that helps us really to make a key difference on the environmental impact and on the footprint area.
Matthew: Great points, and sustainability is I think going to become more of a topic not just for preserving the Earth but as fossil fuels become more expensive there’s a secondary benefit there of looking for ways to keep the input cost down. So it’s a win/win/win all the way around if you can make that happen.
Dr. Stocker: Yes this is exactly and this is the, I insist. the biggest differentiator and was one of the factors that really trapped me and gained me for this project.
Matthew: Patricio, I like to ask a few personal development questions to help listeners to get to know you a little bit. Is there a book that you feel had an important impact on your life or opened you up to a new way of thinking you’d like to share with listeners?
Dr. Stocker: There was one book… okay, there were several books that shaped my life, but there is one book that shaped my vision of Colombia very, very strongly, and it’s the book Cien Anos de Soledad-let me translate it, 100 Years of Solitude- from Gabriel Garcia Marquez, who was the Nobel Prize winner, or the only Nobel Prize winner until Santos received his Nobel Prize for Peace before. And this book really shows this diversity of Colombia, this magical realism. And maybe this book also showed me with all this confusion in a country with so many facets, so many different aspects that you have, why also it is possible within big difficulties to get the best things out of the people.
And here in our concept we really see here how in an environment that was not easy, how we can take all the good things, all the natural and the cost-efficient issues, the environmentally friendly issues that we’re taking out, and taking advantage to produce this cannabis. It’s a really wonderful book with a hundred stories. If you read it, probably you will start forgetting half of the stories when you finish it because it’s many generations of a family going over, and it’s a fiction book but I think it describes Colombia very well. What Colombia says is a magical realism.
Matthew: Great suggestion. Second question. Is there a tool, web-based or otherwise, that you consider vital to your day-to-day productivity?
Dr. Stocker: I think my day-to-day productivity is really moved to being connected. So you are anywhere in the world and through a little phone or a computer allows you really to be in touch with your team in Colombia, with the team in Canada. It allows me to talk to you. It allows to meet investors, to have conferences with our experts, potential distributors. So I think the biggest tool for me is simply the smartphone that allows me to be in touch. I remember when I moved to Switzerland in the 80s to study there I had to pay more than $5 for one minute of a phone call. Today, we have Skype or other different tools, you’re in touch with everybody for zero cost, more or less.
So this is really a tool that made it easy to bring the world closer again, to be in touch with people. Maybe you don’t write any letters anymore. This is the only sad thing about this but you can be connected very, very quickly and very easily. So this is a tool that helps me on my day-to-day basis.
Matthew: It’s a great point. Yeah, it was just a short time ago that it was so expensive for long distance. I remember that too. There’s the futurist, Peter Diamandis, that talks about how the world’s dematerializing, how we used to have a separate GPS device and a separate digital camera and now that’s all in our phone, so those two industries are kind of going away and they’re integrated as an app. It’s just an amazing time.
Yeah, I know I said I only had two questions, but I have a third question for you just because I am so interested in Argentina and what’s going on there. I followed when Cristina Kirchner was the president of Argentina. I just wanted to get your thoughts on the new president, Mauricio Macri and how you felt-- I think I got his name right-- but how you felt that transition was going and what you thought of the Kirchner legacy and the general direction of Argentina.
Dr. Stocker: Oh, first of all, you got the name right. And Mr. Macri is a pro-business person and he brought back Argentina into the financial markets so this, I think, is a first important step for Argentina. He is facing still many difficulties on the . It’s more of a political issue because he’s not from the party that normally had the power in Argentina, so he will struggle with this. But from my point of view he’s doing the right things. The people I have touch with constantly, they are positive. They see Argentina in a different way, and they’re believing in what is really developing today in Argentina. Mauricio Macri also pushed again all the agricultural sector that the former government didn’t want to push and I think Argentina is coming back to the basics and doing its homework and going the right route today.
Matthew: I have to say I’ve noticed a very positive attribute of Argentineans. I lived in Chile for a year and one of my good friends is from Argentina, and I said to him, you have an ability to get things done that I don’t see in other people. He said, you know, the reason why, Matt, is because you come from a system where the system generally works so you just have to focus on whatever it is you’re working on. But in Argentina the system doesn’t work so well so you have to be good on navigating the system that doesn’t work and then doing what you’re doing on top of it. Would you say that’s why Argentineans really have kind of a knack for getting things done, maybe compared to other places? I’m curious of your thoughts on that.
Dr. Stocker: I think this is true, because basic things in Argentina, like we were talking about technology, how easy it is in somewhere in the world to make a wire transfer from your computer or your cellphone or to get an ID, a passport or whatever. Such of those basic things in Argentina aren’t always as easy as probably in the US or in Canada or Europe. But what is interesting here on this side, and coming back to Colombia, and really after all of those years, Colombia is also Latin America, but I see Columbia at a different level of this development. And it’s not Europe, but finally you have many of those things that are so complicated or maybe so complicated in Argentina, like making an international wire transfer. Such kind of things Colombia always had been looking in the last years to support and to make it easy for foreign investment. So you have different countries, you mentioned Chile. Chile is a very much organized country in Latin America and it’s close to where Colombia is becoming today. Argentina still has a long way to go.
Matthew: Okay, great. Well, Patricio, as we close, what’s the best way for listeners to learn more about PharmaCielo if they’re interested in investing or just learning more about what you do?
Dr. Stocker: The best way is to go to our webpage, which is www.pharmacielo.com. There you can find all our approach, many of the things I was telling you, and it’s also the way to make contact with us, to get in touch with us if you’re interested in participating in this unique business opportunity and this unique way to shape the cannabis business in the long run.
Matthew: Well, Patricio, thanks so much for coming on the show today and educating us. We really appreciate it. I forgot to mention you’re joining us from Toronto, Canada, so I hope you can make it down out of the winter in Canada and down back to Medellin soon. Thanks so much again for coming on the show today.
Dr. Stocker: Thank you very much, Matt. I’m very, very happy to be here on your show today and, of course, I’m just here in Canada to meet my main investors and also to remember every day to myself looking at the climate why we’re producing in Colombia.
Matthew: Good point. We could all agree on that.
Dr. Stocker: Thank you very much, Matt.
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