UzCanna to plant Uzbekistan's first legal hemp crop next April

In a historic move, UzCanna Ltd, a Melabis subsidiary based in Malta, has become the first company in modern times to legally import hemp seed into Uzbekistan.

The company, founded in 2018 by British entrepreneur Damon Booth, has imported over four million seeds of Fedora Auto, a hemp variety with low THC content certified, having worked with the government of this landlocked Central Asian country to facilitate the process.

The $33 million investment, spread over five years, will also enable UzCanna to build a state-of-the-art 10,000 m² greenhouse to create a seed bank with the aim of producing an additional eight to ten million seeds.

Planting of the first batch of seeds - supplied by Ventura Seeds - on around 500 fully-secured hectares will begin in April 2023 at the UzCanna farm in the Sardoba district of the Sirdaryo region in central Uzbekistan, with further land set aside for cultivation as the seed bank becomes operational.

Unbeatable prices

According to Damon Booth, buyers have already made themselves known for the first harvest, with each plant expected to offer an abundant CBD biomass of an eighth to a quarter of a kilogram.

Included in the list of certified hemp varieties for the industrial hemp cultivation in the United States and in the European Union, Fedora Auto is an autoflowering variety with THC levels below 0.2 %, but which can provide up to 12 % of CBD.

It will help place UzCanna among the high-potential market players, as it seeks to bring products to consumers at a fairer cost. Damon Booth expects CBD biomass to be sold in Europe at unrivalled prices.

Addressed to BusinessCann from Istanbul, Booth said: «This gives us a head start in Uzbekistan, where we are currently the only company operating in this field. It's an incredibly exciting, but at the same time nerve-wracking decision for us. It's a huge project, the biggest and only one of its kind in Central Asia.

«Depending on the season, we'll be employing up to 200 farmers a year. It's a tough job trying to change a country's outlook, but we're convinced it's the right decision.

Damon Booth

«The benefits for Uzbekistan, both economically and environmentally, will be potentially huge, as we gradually increase our growing footprint year on year, look to develop our own finished products and, within two or three years, expand our reach into Central Asia.»

Melabis has the potential to plant nearly 3,000 hectares - a footprint equivalent to that of a small town - with the aim of doubling its agricultural footprint every year until it reaches full capacity.

Production growth, however, will be determined by the amount of seed the company can produce.

«It's 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 seed importation shows the rest of the world what they could do,» he said.

A business-friendly boom

Construction of the cultivation greenhouse is scheduled to start at the end of January 2023, and will take around six weeks to complete. It will be located next to a dry milling facility, racks and a test laboratory.

UzCanna's move into Uzbekistan was motivated by the climate, low operating costs and the fact that the country is booming commercially.

It brings the legal cultivation of hemp back into the mainstream. a region with a long history of this plant. Many experts believe that the region covered by today's Uzbekistan is where Cannabis Indica first appeared and where it is still cultivated today. where hemp cultivation began.

The cultivation of cannabis plants is legal for state-owned enterprises and for scientific purposes, provided the appropriate license is obtained from the authorities. In March 2020, the authorities Uzbekistan has legalized the cultivation of industrial hemp with THC levels below 0.2 %, on condition that growers obtain a government license.

Booth says: «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 extract finished products. We want to be the wholesale supplier of this product.»

«Right now, these extraction companies are going to Balkan countries - Lithuania and Poland - and Bulgaria, and they're probably paying twice as much for a lower percentage of CBD than we're going to charge.»

Key partners

UzCanna hopes to double its initial harvest of 500 hectares thanks to the seed bank. «It all comes down to making sure we get enough seeds out of the greenhouse and into the ground».

Investors include two organic asset management companies and Daniel Petrov, founding member and former vice-president of’Aurora Cannabis.

Mr. Petrov is part of a group of experts in their field who are working with Melabis to help the company expand into the European and Asian markets.

Other names include compliance and safety expert David Hyde, accomplished financial modeller Adam Siskin, respected extraction chemist Alexzander Samuelsson, Ventura Seed Company agronomist Riki Trowe, ACP Farms CEO Stephen Jordan, and global authority on facility development and operations Jordan Thomson.

It took almost two years of negotiations with the Uzbek authorities for UzCanna to bring about the legislative changes necessary for the success of its activities in the country.

«Our competitors are Africa, China and Colombia when it comes to costs. Nobody can do business in China, in Africa there's too much corruption and too many headaches, and in Colombia it's the same.»

«Yes, we could have given up and gone elsewhere, but when the Uzbek authorities understood our ambition, they knew the opportunity was too good to pass up.»

«This is a case where we finally got it right. And as the only company operating in this field in Uzbekistan, we're ahead of the game.»