IN an historic move, UzCanna Ltd, a subsidiary of Maltese-based Melabis, has become the first company in modern times to legally import cannabis seed into Uzbekistan.
The firm set-up in 2018 by UK entrepreneur Damon Booth, is importing over four million EU-certified, low-THC Fedora Auto, industrial, feminized CBD hemp seeds after working with the government of the landlocked Central Asian country to facilitate the move.
The $33m investment, over five years, will also see UzCanna build a state-of-the-art 25,000sq ft greenhouse to create a seedbank with the objective of growing out another eight to 10 million seeds.
Planting of the initial batch of seeds – supplied by Ventura seeds – on around 500 fully-secured hectares (1,235 acres) will begin inApril 2023 at UzCanna’s farm in the Sardoba district of Sirdaryo region in central Uzbekistan, with additional land earmarked for cultivation as the seedbank comes online.
‘Unrivalled Price Points’
Booth says buyers are already in place for the first crop, with each plant expected to offer an abundant CBD biomass yield of between an eighth and a quarter kilogram.
Included in the list of certified hemp varieties for the cultivation of legal industrial hemp in both the US and EU, Fedora Autoseeds are a full-sun auto flower strain with THC levels below 0.2% but which can deliver CBD up to 12%.
It will help place UzCanna among the most keenly-priced players in the market as it looks to bring products to consumers at a fairer cost, with Booth expecting the CBD biomass to sell into Europe at unrivalled price points.
Speaking to BusinessCann from Istanbul, Booth said: “This puts us ahead of the game in Uzbekistan, where we are currently the only firm operating in this field. This is an incredibly exciting but at the same time nerve-racking move for us. This is a massive project; The biggest and only project of its kind in Central Asia.
“Seasonally we will be employing up to 200 farmers a year – through to trying to change a country’s outlook, but we are confident this is the right move.
“The benefits for Uzbekistan, both economically and environmentally, will potentially be huge as we gradually increase our growing footprint year-on-year, look to develop our own finished products, and in two or three years’ time widen our reach further into Central Asia.”
Melabis has the potential to plant almost 3,000 hectares (7,400 acre) – a footprint equivalent to that of a small city – with the aim of doubling its agricultural footprint every year until it is at full capacity.
Production growth will be determined by the amount of seed the enterprise can produce, however.
“It has 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 the import of seed, shows the rest of the world what they could be doing,” he said.
Work on building the cultivation greenhouse is expected to start at the end of January 2023 and will take around six weeks to complete. It will sit alongside a dry milling facility, stack racks, and a testing laboratory.
UzCanna’s move into Uzbekistan has been driven by the climate, low operating costs and the fact the country is on a pro-business boom.
It brings the legal farming of cannabis back to a region that has a long historical association with the plant. The area covered by present day Uzbekistan is believed by many experts to be where the cannabis indica originated and where the cultivation of hemp began.
It is legal for cannabis plants to be cultivated for state enterprises and for scientific purposes, as long as the right licence is obtained from the authorities. And in March 2020 Uzbekistan’s authorities, made it legal to grow industrial hemp with a THC level lower than 0.2% as long as growers have a licence from the government.
Booth said: “Our aim 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 extracting to finished products. We want to be the bulk supplier of that product.
“At the moment those extraction companies are going to the Balkan countries – Lithuania and Poland – and Bulgaria and they are probably paying twice as much for a lower CBD percentage than we are going to be charging.”
UzCanna hopes to double its initial 500 hectare crop on the back of the seedbank. “It is all down to making sure we get enough seeds out of the greenhouse and into the ground.”
Investors include a couple of bio-based asset management companies, and Daniel Petrov, a founding member and former VP of Aurora Cannabis.
Petrov is among a raft of experts in their field who are working with Melabis to help the company gain a foothold in both the established European market as well as the emerging Asian one.
Other names include David Hyde, a compliance and security expert; Adam Siskin, an accomplished financial modeller; Alexzander Samuelsson, a respected extraction chemist; agronomist Riki Trowe of the Ventura Seed Company; CEO of ACP Farms, Stephen Jordan; and global authority on facility development and operations, Jordan Thomson.
It has taken nearly two years of negotiations with the Uzbek authorities for UzCanna to instigate the necessary legislative changes needed for it to successfully operate in the country.
“Our competitors are Africa, China and Colombia when it comes to costs. No-one can do business in China, in Africa there’s too much corruption and too many headaches, and Colombia, similar.
“Yes, we could have given up and gone somewhere else, but once the Uzbekistan authorities understood our ambition they knew the opportunity was too good to pass up.
“It’s a case of having got there in the end. And as the sole company operating in this field in Uzbekistan, we are ahead of the game.”