INVESTING IN THE FUTURE OF CANNABIS

PharmaCielo Increases Cannabis Cultivation Through External Contractor to Meet Market Demand for Medicinal Extracts
  • Additional area under active cultivation expands PharmaCielo's immediate footprint by 32 percent to 1.6 million square feet with further expansion pending grower license approval
  • Company activates first external cultivation contract with local grower
  • Increased volumes contribute to expanded 360 tonne biomass processing capacity of the Company's new Processing and Extraction Centre

TORONTO and RIONEGRO, Colombia, Aug. 13, 2020 /CNW/ - PharmaCielo Ltd. ("PharmaCielo" or the "Company") (TSXV: PCLO) (OTCQX: PCLOF), the Canadian parent of Colombia's premier cultivator and producer of medicinal-grade cannabis extracts, PharmaCielo Colombia Holdings S.A.S., announced today that it has activated its first external cultivation contract with a local grower. The contract, part of PharmaCielo's long-term external cultivation business growth strategy, provides the Company with a highly cost-efficient and flexible cultivation operation model which allows it to rapidly scale up production.

The enactment of the first medical cannabis farming contract will see PharmaCielo's cultivation immediately expanding by 32 percent to more than 1.6 million square feet (15 ha) with continued enlargement growing cultivated land to a total of 2.6 million square feet (24 ha), pending receipt by the contracted grower of their technical licensing for the additional area.  This represents a doubling of PharmaCielo's currently active 1.2 million square feet (12 h) cultivation, making it Colombia's largest combined medical cannabis grower and processor.

"As our 30,000+ square foot advanced Processing and Extraction Centre facility nears the technical completion necessary for GMP certification, we have been steadily increasing utilization and expanding processing capacity with the appropriate technology, processes and volume expertise."  said CEO David Attard.  "With a biomass processing input capacity of 360,000 kg per year, it is the perfect timing for us to begin activating external cultivation contracts to ensure we have an established inventory of dried flower necessary to expand the output of finished extracts and meet increasing global market demand."

This immediate expansion of cultivation capacity will be dedicated to the  cultivation and harvest of a non-psychoactive CBD dominant PharmaCielo proprietary strain.  Contract growers are provided with PharmaCielo's proprietary strain cuttings for cultivation and harvest on a 12-week cycle, allowing multiple annual harvests. PharmaCielo's agreements with contract cultivators will allow it the flexibility to continue to expand based on need.

The initial external grower contract was granted to Tahami & Cultiflores S.A., an established horticultural grower led by PharmaCielo co-founder, former executive and director Federico Cock-Correa.  The agreement sets a series of obligations for the grower based on supply to PharmaCielo of specified quantities of plant material that come from the process of planting, cultivating, harvesting, pre-drying and de-stemming cuttings.  The agreement also allows inspections of the grower verifying compliance with contractual protocols, cultivation and quality standards and conformity with government regulatory requirements and certifications.

"Our decision to grant the initial external cultivation to Tahami was a deliberate strategy to guarantee quality given the unparalleled experience held by Federico with commercial volume cannabis cultivation and the growing requirements of the PharmaCielo certified strains," added  Attard. "Future contracts with additional growers will seek to replicate the same knowledge and experience."

The outsourcing contract supplements PharmaCielo's in-house cultivation operation in its Rionegro complex that will increase focus on growing psycho-active strains, while greater cultivation of non-psychoactive strains will be carried out by the external designated grower. All quality controls and supervision requirements of the off-campus cultivation will be done in accordance PharmaCielo's Good Agriculture Practices (GAP) and ISO9001:2015 standards.

About PharmaCielo
PharmaCielo Ltd. (TSXV: PCLO, OTCQX: PCLOF) is a global company, headquartered in Canada, with a focus on ethical and sustainable processing and supplying of all natural, medicinal-grade cannabis oil extracts and related products to large channel distributors. PharmaCielo's principal (and wholly owned) subsidiary is PharmaCielo Colombia Holdings S.A.S., headquartered at its cultivation and processing centre located in Rionegro, Colombia.

The board of directors and executive team of PharmaCielo are comprised of a diversely talented group of international business executives and specialists with relevant and varied expertise. PharmaCielo recognized the significant role that Colombia's ideal location plays in building a sustainable business in the medical cannabis industry, and the Company, together with its directors and executives, is executing on a business plan focused on supplying the international marketplace.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this press release.

Forward-Looking Statements

This press release contains forward-looking statements. Forward-looking statements can be identified by the use of words such as, "expects", "is expected", "intends", "believes", or variations of such words and phrases or state that certain actions, events or results "may" or "will" be taken, occur or be achieved. Forward-looking statements include statements with respect to the expansion of PharmaCielo's footprint, the receipt of grower license approval, the Company activating other cultivation contacts with local growers, the expansion of production capacity, scaling up of production, receipt of GMP certification, increase of production capacity, establishing an inventory of dried flower, expansion of cultivation capacity, growth of non-psychoactive strains and quality controls and supervision by the Company in accordance with the Company's Good Agriculture Practices (GAP) and ISO9001:2015 standards. Forward-looking statements are based on assumptions, including with respect to the ability to obtain all necessary governmental regulatory approvals including grower license approval, the Company's ability to execute on expansion of its footprint, increase production capacity and that there will be no unexpected logistical delays associated with this growth, the Company's ability to meet the requirements of GMP certification and the Company's ability ensure external contract growers operate in accordance with the Company's Good Agriculture Practices (GAP) and ISO9001:2015 standards. Forward-looking statements can be affected by known and unknown risks, uncertainties and other factors, including, but not limited to, risk that necessary governmental regulatory approvals may not be obtained or may not be obtained in time to execute the Company's business objectives, logistical issues that may prevent the Company's anticipated growth including those related to COVID 19, the Company's ability to obtain the necessary permits and licenses it requires in order to export its products from Colombia and into other countries, that the Company does not control its third party contract growers, risks associated with the regulation of cannabis and cannabinoid derivatives, risks associated with operating in Colombia, and currency exchange risk. Accordingly, readers should not place undue reliance on forward-looking statements.

Except as required by law, PharmaCielo undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE PharmaCielo Ltd.

For further information: David Gordon, Chief Corporate Officer, +1.416.864.6116, investors@pharmacielo.com; Media Relations: International: Gal Wilder, Cohn & Wolfe, +1 647-259-3261, gal.wilder@cohnwolfe.ca; Colombia: Giselle Díaz Bermúdez, SPR Group, + 57 310 859 5468, Giselle.diaz@sprgroup.biz; Investor Inquiries: investors@pharmacielo.com