Colombian cannabis firm Khiron Life Sciences (TSXV: KHRN) has agreed a deal to purchase Italian hemp producer Canapalife for C$10.5 million.

Canapalife operates a cultivation site in Padua, the setting of William Shakespeare’s Taming of the Shrew. It conducts research in partnership with local universities and it has registered three consumer brands.

The firm produces CBD e-liquids, neutraceutical CBD products and hemp seeds for export to other EU countries. It has listings for its products with various retailers and pharmacies throughout Italy.

Khiron will issue common shares equal to C$10.5 million in order to get the deal done, and it could rise to C$15 million if certain operational milestones are met. Current Canaplife owners Alvaro Garro and Paolo Puggioni will stay on as senior Khiron executives when the deal goes through in the next couple of months.

Italy is the second biggest European market for cannabis and it should be worth €7.5 billion by 2028, according to Prohibiton Partners. It is the fourth largest economy on the continent, after Germany, the UK and France, but its marijuana industry is one of the most advanced.

It legalized medicinal marijuana in 2013 and cannabis consumption increased 10 times in the ensuing four years, while demand continues to soar. It is also legal to grow hemp with THC levels below 0.2% and growers have planted it across the country.

“The proposed transaction offers Khiron an entry to the European market and expansion of our global footprint,” said chief executive Alvaro Torres. “In addition to increasing our multi-jurisdiction cultivation and production capacity, Canapalife offers the addition of dynamic brands to our product portfolio, access to key retailer partners and relationships with Italy’s leading research facilities.”

Khiron is based in Colombia and it also has operations in Chile and Mexico, while former Mexican president Vicente Fox is on the board of directors. It listed on the TSX Venture Exchange in May 2018 and since then its share price has increased by more than 160%.

It recently launched a joint venture along with Dixie Brands to bring a wide range of concentrates to the Latin American market.