Kaya Holdings Makes Progress in International Expansion

Kaya Holdings Inc. (OTCQB: KAYS) was a pioneer in the U.S. cannabis industry and now sets its sights on high-growth international opportunities in Israel and Greece. After forming Kaya Brands International in September 2019, the company applied for cannabis cultivation and processing licenses in Israel and acquired a 50% stake in a Greece-based cannabis license holder.

 

By structuring these deals through subsidiaries, the company aims to minimize any dilutive financing for its existing shareholders while capturing the massive upside potential for these projects. The European Union is widely expected to become the world’s largest cannabis market over the next five years with upwards of €123 billion in 2028 sales.

 

Let’s take a look at the company’s recent progress in advancing these ventures and why investors may want to take a closer look at the stock.

 

Also see: Kaya Holdings: A Blueprint for Low-Dilution, Low Cost International Expansion

 

Securing an Israeli Permit

 

Kaya Holdings’ Israeli subsidiary, Kaya Shalvah, was recently awarded an initial permit from the YAKAR, the Department for Medical Cannabis in the Israeli Ministry of Health, to develop an Israeli cannabis cultivation and processing facility.

 

The initial permit grants the company permission to proceed with its plans to develop a commercial scale cannabis cultivation and processing site at the Green Negev cannabis complex in Yerucham, Israel, pending its tether for land. A final cultivation and processing license will be issued after the site is developed in accordance with regulations and passes inspection.

 

The company has eyed a 25-acre plot in Yerucham with plans for 20 light deprivation greenhouses and a 2.5-acre processing center, along with an 8,000 sq. mt. structure for ancillary services. Following the successful license award, management anticipates completing a land tender in June 2021 and raising $75 million to build out the project by August 2021.

 

Management projects that the project will begin cultivation activity in May 2022 with initial revenues beginning to materialize in March 2023. 

 

Raising Capital in Greece

 

Kaya Holdings’ owns a 50% interest in Greekkannabis through Kaya Kannabis, which has acquired a license and optioned a 15-acre plot in Thebes, Greece for cultivation and processing with 12 light deprivation greenhouses and an additional 8,000 sq. mt. for ancillary services.

 

The company recently engaged Dutch-based Orange Ridge Capital to raise up to $45 million to complete the construction of the facility in Greece. With an installation license and six off-take agreements in hand, the project is well positioned to raise capital while its 150-strain genetic library could provide a significant competitive edge in the market.

 

Management projects that the project will begin cultivation facility in May 2022 with initial revenues materializing in December 2022.

 

Looking Ahead

 

Kaya Holdings has made significant progress in advancing its international ventures without diluting existing shareholders. In fact, the company’s management team and board of directors owns nearly 12% of outstanding shares, so they’re incentivized to minimize dilution. By leveraging its domestic experience, the company hopes to avoid many of the pitfalls that early cannabis companies in the U.S. and Canada faced and deliver long-term shareholder value.

 

Fundamental Research Corp. recently conducted a discounted cash flow analysis that took into account both its domestic operations and international expansion opportunities. Analyst Sid Rajeev, B. Tech, CFA, MBA, concluded that the net present value of these opportunities was at least $0.89 per share—a significant discount to the current market price.

 

Investors may want to take a closer look at the company as it continues to advance its international operations. At the same time, improvements in the domestic cannabis industry could spark further increases in value given its presence in Oregon and growing number of brands launched through its own stores and third-party distributors.


Originally published by CFN Media Group. 

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