Khiron Completes First Phase Of Business Optimization, Reduces Total Direct Labor Headcount By More Than 70% In Its Colombia SAS Subsidiary

Khiron Life Sciences Corp. KHRNF KHRN A completed its first phase of business optimization in Colombia, to focus on its high-margin B2C business model, centered around its clinic operations.

The company's focus in Colombia is to continue to generate demand through the increase of insurance coverage for medical cannabis in its Zerenia clinic network and expanding access to Khiron's medical cannabis products in other clinics and hospitals across the country.

At the same time, Khiron is reducing non-core, cash-intensive activities. As part of this initiative, the company began wind-down of its cultivation and extraction operations in Colombia in early 2023 and has now ceased all its own upstream activities. As a result, the company has reduced total direct labor headcount by more than 70% in Khiron Colombia SAS from June 2022 to April 2023, as well as a reduction in senior executive compensation and positions by more than 50%.

The company has entered into a partnership with an accredited 3^rd party contract manufacturing organization in Colombia to outsource the production of Khiron-branded medical cannabis products. Under this agreement, Khiron's partner has: purchased Khiron's extraction and laboratory equipment, stored the company's existing inventory of dried flower and full spectrum extracts to manufacture final product for the company. In addition, Khiron's partner will distribute products to Khiron and Zerenia's patients across Colombia. Through this partnership, Khiron will also be able to leverage the partner's established network of over 300 hospitals and pharmacies across Colombia to increase product sales.

Moving forward, Khiron will continue to implement initiatives to simplify the company's overall group structure in Latin America, focusing on business operations with a clear short-term positive cashflow outlook.

Photo by Ryan Lange on Unsplash

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