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Uruguay cannabis firm seeks up to $30 million as capital returns

A marijuana plant grows at El Piso Cannabis Club in Montevideo, Uruguay.Matilde Campodonico

Silverpeak Life Sciences Uruguay Inc. is looking to raise as much as $30 million from institutional investors in the fourth quarter as it sees capital markets opening to cannabis companies again.

Cost cutting and consolidation among North American producers since the start of a liquidity crunch in the second half of 2019 has left “a much stronger field of opportunities” for investors, Silverpeak Chief Executive Officer Jordan Lewis said in a telephone interview.

“We are just beginning to see the re-emergence of cannabis capital markets,” said Lewis, who said he sees a place for cannabis in the post COVID-19 global economic recovery. “It’s one of the few industries where there is growth potential.”


Several large Canadian and US companies reported running low on cash and struggling to raise more even before the pandemic, which made a bad situation worse as volatility spiked in financial markets. British Columbia-based Silverpeak had already secured $25 million from investors before capital became scarce.

Lewis said he plans to pour the $20 million to $30 million Silverpeak expects to raise into expanding production at its Uruguayan subsidiary Fotmer Corporation SA, which holds a license to produce as much as 200 metric tons a year of THC-rich dried flower for medical uses. Lewis declined to comment on production levels this year.

Uruguay was the world’s first country to legalize most uses of marijuana.

Fotmer is on track to reach breakeven and positive free cash flow in 2020, said Lewis, noting that dried flower exports could rise to about eight tons from just over a ton last year. The pandemic didn’t disrupt Fotmer’s operations, though the export permitting process was delayed about three months due to a change in government and the COVID-19 outbreak.

Israel and European Union markets including Portugal and Germany have emerged as the largest buyers of Silverpeak’s flowers, he said.


“We are looking to go into a more retail channel before the end of this year” for finished flowers in the EU, he said.