Drifting just an hour from the vibrant arteries of San Juan, Puerto Rico’s capital, past a mosaic of color-doused houses and palm-enshrouded highways, a hidden gem emerges on the island’s eastern seaboard. Here, where the rhythm of Latino and Caribbean tales intertwine with the allure of American character, we encounter the city of Humacao.
Within this charismatic cityscape, abutting a peaceful cemetery and an imposing GSK pharmaceutical facility, lies a truly extraordinary find: the most colossal indoor cannabis operation in Latin America. Enter Puerto Rico Industrial Commercial Holdings, or as it’s better known, PRICH Biotech, the top-selling pure-play cannabis company in Latin America.
420,000 Square-Free Square Feet
The striking size of PRICH’s facility – a humorous 420,000 square feet, wittily echoing the notorious number woven into cannabis folklore – is not its sole captivating facet. The individual helming this audacious venture brings a remarkable human dimension to this tale. Mounir Kabche, a bearded youthful visionary, is the dynamo propelling PRICH. With his roots deeply planted in Venezuelan soil, Kabche embarked on a journey to Puerto Rico, drawn by the promise of a more radiant future and bountiful business prospects, an expedition that has allowed him to flourish not only in the cannabis sector but also in the real estate sphere and beyond.
* Check out this video of my visit to the facilities in Puerto Rico. Remember to turn English CCs on.
Kabche’s odyssey is mirrored in his magnetic persona; his youthful vitality is readily apparent, belying his age of less than 40. His visage, underscored by a robust beard, exudes determination, a testament to his resilience through the trials of life. Yet, behind this façade resides a resolve as firm as steel, instrumental in sculpting a prosperous career in his newfound homeland.
Radiating an undeniable sense of pride, Kabche elaborates on the impressive breadth of PRICH’s operations. His enterprise, a carefully built empire, boasts 20 flourishing dispensaries under its wing. Beyond catering to its own dispensaries, this conglomerate extends its reach to serve a diverse range of wholesale clients, amplifying the influence it holds in the industry. Undeterred in their belief, he and his team have invested substantially in the facilities, working together every step of the way. “We believe in the industry, we invest in the facilities, and we have worked hand-in-hand with our team,” he asserts.
Beside the tranquil whispers of the neighboring cemetery, where narratives of bygone eras blend seamlessly with the island’s rich cultural quilt, PRICH shines as a luminary of transformation. It’s more than simply cultivating a plant once immersed in controversy; it’s about championing progress, exemplifying resilience and seizing the burgeoning opportunities within Puerto Rico’s own green rush.
As we delve deeper into PRICH’s journey, we find ourselves marveling at how a young Venezuelan emigrant’s vision, nurtured by unwavering determination and tenacity, has transformed the face of Puerto Rican industry. Its a testament to how commitment and a keen eye for opportunities can lead to the growth of an enterprise that now stands as a beacon of hope and a symbol of economic resurgence in a land that prides itself on its resilience.
A Flourishing Latino Market
Within the Latin American cannabis market, Puerto Rico leads with an impressive $250 million in estimated annual medical cannabis sales. Even though the rest of Latin America has the potential for larger sales in the future, these figures have not yet materialized, as evidenced by the relatively small numbers seen in 2022.
Take Brazil as an example. Its sales for 2022 are estimated to be around $37.1 million — per Prohibition Partners. This figure, while higher than the previous year, is still significantly lower than Puerto Rico’s sales, which exceed Brazil’s figures by more than six times despite Puerto Rico having a population size 65 times smaller. Even Brazil’s projected sales for 2026, estimated at $181 million, do not come close to Puerto Rico’s current sales.
Argentina, Chile and Colombia, some of the larger markets in Latin America, had estimated sales of about $7.7 million, $3.5 million, and $6.8 million, respectively, in 2022. Even with their anticipated growth by 2026 (forecasted sales of $37.2 million in Argentina, $16.9 million in Chile and $33.5 million in Colombia), these figures fall significantly short of Puerto Rico’s sales.
Mexico, another potential big player in the market, is estimated to have generated sales of about $17.9 million in 2022. This figure, although expected to multiply to nearly $88.8 million by 2026, is still a fraction of Puerto Rico’s current sales.
So, even though the Latin American cannabis market holds considerable potential for growth, the actual sales figures so far remain relatively small. The total sales across all of Latin America in 2022 are estimated to be around $82.3 million. Having said this, the figure is predicted to surge nearly fivefold, reaching over $404 million by 2026. “[This is why] we are exploring several markets in Latin America and hopefully soon we can deliver a surprise,” Kabche interjects, signaling PRICH’s imminent foray into new regions.
Puerto Rico: A Unique Territory
Located at the strategic epicenter of a vibrant market, PRICH astutely navigates Puerto Rico’s unique position as a U.S. territory with its own distinct cannabis laws. This Caribbean haven offers an exceptional environment for cannabis enterprises, unlike the American market’s challenging hurdles, such as section 280-E of the tax code, which disallows deductions for businesses “trafficking” controlled substances, including the still federally illegal cannabis plant and its derivatives. Here, cannabis ventures benefit from their unique legal standing as foreign corporations for federal tax purposes. This exempts them from federal income tax and certain local tax liabilities. Leveraging these distinctive benefits and steering through the complex legal and cultural landscape, PRICH has successfully carved a robust presence in this swiftly expanding market.
“PRICH’s success mirrors the wider trends we’re witnessing across Latin America,” comments Andrew Berman, PRICH’s president of operations. “The region is progressively welcoming cannabis for both medical and, where permissible, recreational use. We’re standing at the dawn of a dynamic, economically potent industry.”
Yet, the story extends beyond simply mapping PRICH’s remarkable success and Latin America’s rapidly flourishing cannabis market. It’s a narrative of evolving attitudes, regulatory shifts, entrepreneurial vision and scientific innovation. It paints a picture of a region shaking off the historical bias and misconceptions surrounding cannabis, and recognizing its potential. As this saga unfolds, it unveils Latin America’s emerging prominence as a global cannabis powerhouse, with PRICH steering this transformative voyage.
And it is in this innovative environment, in the heart of Humacao, home to acclaimed musician Eladio Carrión, that we find PRICH Biotech. This behemoth, initially a real estate venture, has evolved into the most substantial vertically integrated cannabis enterprise in Central America and the Caribbean.
As Kabche notes: “What could be a better gateway into the cannabis industry than a pharmaceutical facility, bristling with cutting-edge technology?”
He elaborates on why the opportunity was too compelling to pass up. “Puerto Rico, with its unique tax laws and an impressive talent pool – a place where 12 of the top 20 best-selling U.S. drugs are produced – was an undeniable attraction. Today, we proudly employ over 350 individuals, operate 20 dispensaries and command a 40% market share.”
Latin America’s Hidden Gem
What sets PRICH apart from most Latin American companies, many of which report humble earnings – if any, is its powerful market position. With yearly sales of approximately $50 million, the company is a significant revenue driver in Latin America’s cannabis industry, fueled by its robust sales through medical dispensaries. In fact, PRICH’s current sales figures establish it as the highest revenue-generating cannabis company in all of Latin America, as per publicly available data.
To understand the scale of PRICH in the context of Latin America, one needs to look at its peers. Let’s first analyze the present market capitalization of several key players in the Latin American cannabis industry, namely in Colombia, where companies are most developed and investment has reached its highest point in the region.
For instance, Flora Growth and Allied Corp., two of the largest (and publicly-traded) businesses in the region, are currently (as of July 13, 2023) valued at $17.77 million and $19.4 million, respectively. Clever Leaves carries a market cap of $10.74 million. Meanwhile, after adjusting for currency exchange, the Canada-based Khiron, Avicanna and PharmaCielo have market capitalizations of approximately $7.07 million, $17.05 million, and $20.19 million, respectively.
However, the current scenario highlights an intriguing disparity between the perceived market values of these companies and the tangible value of their assets. It’s a known fact among seasoned market watchers that stock valuations can often seem detached from company fundamentals, particularly during turbulent market phases.
Just because these companies’ market caps fall short of PRICH’s annual sales, this doesn’t necessarily reflect on their success or potential as worthwhile investments. While a company’s market cap provides insight into market perceptions, it is not always a direct measure of a company’s operational performance, asset value or future profitability. Rather, it’s a transient snapshot of the market’s valuation, susceptible to a myriad of influences, from macroeconomic climate and industry trends to market sentiment and speculative trading.
Temporary downturns in valuations are not unheard of, especially in volatile sectors like cannabis. Amid economic uncertainties, regulatory shifts and other global influences, the sector is currently wrestling with a general decline in stock prices. Consequently, these diminished market caps should not be misconstrued as a conclusive verdict on these companies’ worth or potential.
Nonetheless, sales numbers don’t paint a very different picture. In 2022, PharmaCielo reported revenue of roughly $4.03 million, a three-fold increase from the $1.44 million it reported in 2021. Despite this promising growth, it still doesn’t reach the $50 million benchmark set by PRICH’s annual sales.
Flora Growth, which is trading on the Nasdaq, reported a substantial $37.2 million in revenue in FY2022, signifying a 314% increase YoY. The company projects its 2023 revenue guidance to be $105 million, with expected organic growth in its house of brands division and an expansion of the commercial and wholesale division’s capabilities. However, most of these anticipated sales are expected to originate from regions outside of Latin America.
Meanwhile, one thing is clear: for now, PRICH holds the lead, outpacing them all.
For Kabche, quality is key in this endeavor and its success. His confidence in the company’s unique processes and technologies is evident as he elaborates, “We have developed our own processes and technologies that make us competitive and that is why we will continue to increase our production by improving these processes. All this will result in a lower production cost, and that will translate into quality and more attractive prices for our patients.”
As Kabche reflects on the birth of his company, an enlightening tale surfaces. His journey into the cannabis industry emerged from a serendipitous intertwining of two pivotal events: His team had acquired an expansive 420,000-square-foot pharmaceutical facility in Puerto Rico just as the island began greenlighting medical cannabis licenses.
In that instant, an epiphany struck like a lightning bolt. “And so, we thought: what better place than a pharmaceutical facility to start producing medicines for the people in the best conditions possible?” It was this simultaneous occurrence of events that signaled the dawn of PRICH Biotech, setting the stage for its unprecedented journey in the cannabis industry.
Serving The Masses
PRICH’s surprising success in servicing more than 300 dispensaries serves as a riveting case study, especially considering the societal stigma surrounding cannabis both on a global and local level. Kabche credits this success not only to the superior quality of the company’s products but also to the shift in public sentiment toward cannabis, brought about by the spreading of informed awareness.
However, PRICH’s ascension to prominence was not without its challenges. Kabche vividly recalls the astonishment his choice to enter the cannabis industry provoked within his traditional family, originally from Venezuela, but with Lebanese roots. Nevertheless, a turning point arrived in 2016 when a national survey revealed a 65% approval rate for medical cannabis among Puerto Ricans. Kabche firmly believes that, “Once people are armed with reliable information, transformation is inevitable.”
Regarding the often-exaggerated risks associated with cannabis use, Kabche further clarifies, “It’s a shocking statistic that selfies cause 45 deaths annually, while medical cannabis causes none. Not only that, it offers steady employment, augments state tax revenue and enhances overall quality of life.”
A Real Estate Play At Heart
PRICH’s trajectory challenges the conventional narrative surrounding cannabis investment. It underscores the crucial, yet frequently underestimated, role that real estate plays in this sector – a fact highlighted on Forbes in 2021. Be it through reinventing laboratories, abandoned greenhouses and even prisons, or securing strategic locales for retail storefronts, real estate serves as a viable entry point into the cannabis economy.
“We approached our investment with a holistic perspective,” shares Kabche. “Our experiences across different sectors have provided us with a wealth of insight that we’ve poured into our cannabis venture. After all, the cannabis business isn’t one-dimensional; it encompasses agriculture, manufacturing and retail. This well-rounded understanding propels us towards our vision of ‘Cannabis 2.0.'”
Kabche’s “Cannabis 2.0” vision transcends the traditional commodity-based view of cannabis. It underscores the importance of technological innovation in delivery systems and patient care, ensuring that cannabis is as reliable and accessible as any other consumer good.
Always Hungry
While PRICH’s current focus lies in Puerto Rico, Kabche’s vision is not bound by geographical limitations. “The federal legalization of cannabis in the U.S. seems inevitable, and we are primed to seize that opportunity,” he says, explaining part of this process entails expanding the company’s cultivation area by 50%. “Our strengths lie in our diligent workforce, our scale, and our foresight in anticipating market demands,” he adds.
Even while controlling 40% of the market, PRICH continues to invest. As prices drop, Kabche believes the company is on track to become a dominant force not only in the U.S. but also in Argentina and Panama. “Argentina’s market is vast, and we see enormous potential for investment in research and development there.”
Gazing into the future, Kabche unveils his aspirations for the company. Its blueprint for success involves opening more dispensaries across Puerto Rico, a strategic move aimed at ensuring it remains attuned to the ever-evolving needs of their patients. The cornerstone of this plan is accessibility, striving to be within reach of every individual in need through its dispensaries and commercial partnerships.
But, to this executive, triumph in the cannabis sector requires more than cost efficiency. It necessitates persistent innovation in products and services. “Those who fail to innovate will be left behind,” he cautions. “That’s why we talk about ‘Cannabis 2.0.’ Our aim isn’t just to follow the crowd but to lead it. We strive to diversify, to stand apart.”
The ascent of PRICH Biotech paints a striking picture of the changing currents in the cannabis industry, particularly in Latin America. The company has successfully navigated the complex maze of regulations and cultural barriers and harnessed the winds of change to propel its progress.
PRICH has evolved from a simple real estate venture into a robust symbol of Puerto Rico’s progressive attitude towards cannabis, signifying a future where the plant is not merely accepted but seen as a significant economic propellant. It’s a tale of innovation, resilience and vision, encapsulated in the journey of a single company that dared to believe in the potential of a misunderstood plant.
Stay tuned for more stories about hidden gems in the global cannabis industry.
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