MEDICAL LATIN AMERICA & CARIBBEAN SPECIAL REPORT

17 56 59 72 CULTIVATING BUSINESS PHARMACEUTICAL & MEDICAL SERVICES & TECHNOLOGY EVENTS Progressive, inclusive medical CBD popularity is surging across The industry A robust events industry cannabis policies can have a the continent as regulatory is birthing a range of secondary has grown around the significant social impact regimes jump to legalize it services across the region medical cannabis sector Image: Nader Ahmed, IndicaOnline Contents 1 FROM THE EDITOR’S DESK

Managing Director LATAM Han Le Regional Director LATAM Federica Fermo Country Managers Blanca Bañares, Giulia Di Loreto THE BUSINESS YEAR: Country Editors Alejandra Gómez Arreola, Juan Pablo Vásquez Pedraza, Juan Manuel Mejía Salazar, Enrique José García, MEDICAL CANNABIS Daniel Alarcón Project Assistant LATIN AMERICA Angie Serrato Chief Executive Officer Ayşe Hazır Valentin Editor-in-Chief & CARIBBEAN Peter Howson Senior Editor Terry Whitlam Writer/Editor SPECIAL REPORT Evan Pheiffer Associate Editor Liz Colavita Chief Sub-Editor Shireen Nisha Sub-Editors Kabir Ahmad, Alia Kıran Editorial Coordinator Belemir Ece Çolak Web Editor Aidan McMahon Web Assistant & Social Media Coordinator Ahsen Durukan Web Developer Volkan Görmüş Assistant Web Developer Zişan Yalçınkaya Analytics Assistant Sena Özcanlı Art Director Emily Zier-Ünlü Junior Art Director Emre Boduç Senior Motion Graphic Designer Serkan Yıldırım he Business Year’s Special Report on market, and as the ideal exporter to its neigh- Motion Graphic Designer Medical Cannabis in Latin America bor and largest cannabis (medical or other- Yiğit Yeşillik T Senior Graphic Designers and the Caribbean is the second entry wise) market, the US, but has yet to clear the fi- Bilge Saka, Şule Kocakavak in our medical cannabis series, building upon nal obstacles in the country’s legal process and Contributors our inaugural report on the Colombian market. in its generally socially conservative society. Mark Szawlowski While legislative progress did not move as rap- has perhaps the best built-in country Transcribers Michael Mariaud, Adrian Espallargas, idly as hoped in some markets, such as in Mex- branding, ideal growing conditions, as well as Susan Barrett, Heather Conover, Kevin Mataraci, Jeffrey Rogers, ico, 2019 also witnessed other markets such a long history of local expertise in growing the Emily Damgalı, Jason Shaw, as Brazil reaching long-awaited liberalization plant. How will it leverage these advantages to Emi Teruya, Oscar Crespo, milestones. This report is a comprehensive ex- become a major player and investment des- Cain Day, Gillian Docherty HR Manager amination of that progress and of the current tination? may have a head start in Merve Yıldırım investment climate throughout Latin America comparison to its neighbors, but it is experi- PR Manager and the Caribbean. To understand how these encing its own regulatory and licensing bottle- Şölen Cenberoğlu Operations Manager developments are shaping local markets and neck. How can the country maintain its posi- Öznur Yıldız global investor attitudes on the region, The tion as other markets begin to liberalize? Brazil Operations Assistant Business Year sat down with the industry lead- made huge international waves by opening up Can Ünsan ers, local entrepreneurs, regulatory adminis- its domestic market, while still prohibiting cul- Office Coordinator Gamze Zorlu trators, government legislators, legal advisors, tivation. Finance Director medical researchers and global investors that It is true that the entire industry is in an ex- Serpil Yaltalıer are driving medical cannabis forward. citing stage of flux, but nowhere is this more Finance Assistant LATAM Fernando Amezcua Estrada Perhaps what makes the medical cannabis apparent and abundant than in Latin America Accounting Manager industry most interesting in the region is the and the Caribbean. While no one can know for Quenie Ann Gonzales differences of development model that each certain what will happen next, the interviews Office & Finance Assistant country is pursuing, as well as the variety of with the people who will be responsible for this Lovely Mae Jesalva advantages available. , for example, has region’s future can be found on the following enormous potential as a producer, a domestic pages. ✖ MEDICAL CANNABIS LATIN AMERICA & CARIBBEAN SPECIAL REPORT

7 8 26 38

Published 1 From the editor's desk 10 CULTIVATING 30 REGULATORY 1Q20 5 Rodrigo Arcila Gómez, Executive BUSINESS & LEGAL President, Colombian Association of Cannabis Industries 11 Yes we can-nabis • Chapter 31 The need for clarity • Chapter (Asocolcanna) • Interview summary summary

6 An opportunity • Spotlight feature: 14 Álvaro Torres, CEO & Director, 34 Lincoln Allen, CEO, Cannabis Key players Khiron Life Sciences Corp. Licensing Authority (CLA) • Interview • Interview 7 Vicente Fox, Former President of Mexico, Member of Board of 16 David Attard, CEO, PharmaCielo 35 Margarita Cabello Blanco, Directors, Khiron Life Sciences Corp. • Interview Colombian Minister of Justice • Interview and Law • Interview 17 The deeper the roots • Focus: 8 Steve DeAngelo, Founder, Last Social impact 36 High expectations Prisoner Project • Interview • Communiqué: Legal 18 Carlos Velásquez, Chairman, 9 Juan Manuel Galán, Former FCM Global • Interview 38 Julio César Aldana Bula, General Senator, Congress of Colombia Director, The National Institute of 19 Alejandro Marín, CFO, • Interview Food and Drug Surveillance (Invima) FCM Global • Interview • Interview 20 Voices from the sector 39 Juan Diego Álvarez, 22 Johanna Urrego, CEO, Kure VP of Regulatory Affairs, Khiron Life Medical Solutions • Interview Sciences Corp. • Interview

23 José J. Bitar, Executive 40 Diego Ruíz, Regulatory Affairs President, GAIA HEALTH Officer, FCM Global • Interview • Interview 41 Felipe Velásquez, CEO, 24 Michael Nistorescu, CEO, and FCM Global • Interview Eduardo Mayorga, President, 42 Raúl Buriticá, Partner, CannaVerde Pharma • Interview Buriticá Abogados • Interview 26 Diane Scott, Group CEO, Jamaica 43 Xavier Valverde Carcache Medical Cannabis Corporation Group Partner, Prætorium • Interview of Companies (JMCC) • Interview 44 Back to legalization 27 Sebastián Salazar Fuentes • Communiqué: Legal status CEO & Founder, Botaniktech of in Ecuador • Interview 47 Jasiel Espinosa, President, 29 A company with a humanistic Fundación Ananda & President, focus • Communiqué: GAIA HEALTH Hemp Solution Latinoamerica • Interview Contents 3

51 63 74 82

48 PHARMA- 58 SERVICES 72 EVENTS 80 INVESTMENT CEUTICAL & TECHNOLOGY 72 The big show • Chapter SPOTLIGHT summary & MEDICAL 59 The only way is up • Chapter 80 Fresh greenbacks • Chapter summary 74 Cassandra Farrington, summary 49 Feel-good factors • Chapter Co-founder & Chair of the summary 60 Chris Bolton, COO, theracann 82 César Gutiérrez, Managing Board, Marijuana Business Daily INTERNATIONAL • Interview Partner, Bastion Capital Advisors 51 Martha Oyuela, Health Vice (MJBizDaily) • Interview (BCA) • Interview President, Khiron Life Sciences Corp. 63 Zachary Venegas, CEO, Helix TCS 75 International events • B2B • Interview • Interview 84 Juliana Trujillo, CEO & President, 76 Julián Tobar, CEO, ExpoCannaBiz Green Queens Colombia S.A.S. 53 Elsa Navarro, Skin Unit Manager, 64 Ángel Paul Proaño, Director of • Interview • Interview Khiron Life Sciences Corp. Sales and Marketing, Western States • Interview • Interview 78 Douglas Gordon, Founder, 85 Daniel Molano, CEO, Cannagustin CanEx Jamaica • Interview • Interview 54 Frank LaMadrid, Owner, 67 Giadha Aguirre de Carcer, Cannabis Medical by Frank LaMadrid Founder & CEO, New Frontier Data 79 Carol Ortega, CEO, Muisca 87 Diego Triana, CEO, Virgin • Interview • Interview Capital Group • Interview Cannabis • Interview

56 CBD: the sina qua non of a good 68 Coen Esser, Managing Director night’s sleep? • Focus: CBD for Colombia and Central America, Control Union Colombia • Interview 57 José Lugardo Espejel, Founder & CEO, Sativa Care • Interview 71 Mauricio Name, CEO, Garden Supply South America • Interview

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Contents 5 INTERVIEW banding TOGETHER

Rodrigo Arcila Gómez EXECUTIVE PRESIDENT, COLOMBIAN ASSOCIATION OF CANNABIS INDUSTRIES (ASOCOLCANNA)

With impressive growth in Asocolcanna’s membership and widely attended forums, it is clear the medical cannabis industry in Colombia is here to stay and will benefit greatly from further dialogue with public authorities on the industry’s regulation.

What were the expectations of Asocolcanna’s first -fo ment would be more cautious with the develop- rum hosted in in 2019? ment of this industry. However, there has been Uniting This was perhaps the most representative forum full support from both the president and the companies held so far in Colombia for several reasons. The ministries. It presents many signs of high growth. forum included discussion and dialogue with the Consequently, we will have a National Council of focused on government and its institutions. We did it with Economic and Social Policy (CONPES) document cultivation, the legal industry and all the industries that have that will set the guidelines for the development manufacturing, to conform to the country’s new regulations and of a sector like ours. This is a clear sign that this statutes. It was an opportunity to have construc- industry is moving forward. processing, and tive dialogue with the health minister, foreign derivatives trade minister, justice minister, the Colombia Are investment resources, according to CONPES, also National Food and Drug Surveillance Institute secured by the national budget? What proposals or ini- (INVIMA), Colombia Agriculture Institute (ICA), tiatives does CONPES offer? Cannabis and the National Narcotics Fund, among others. The possibilities will be analyzed. There may be many possibilities in R&D through , industry’s R&D What can you say about private investment in Colombia research centers, and laboratories that can be potential must in medical cannabis initiatives? channeled toward the important goal of cannabis be harnessed I visited several industries in Colombia and was development and research. This sector was born surprised by the speed at which they are working. out of the purpose of generating internal added through I have told the government that it is necessary value. Unlike other sectors of production, such research centers, to go to the countryside to see what is happen- as coffee, this sector could provide an important universities, ing. Otherwise, we will think that these are con- R&D component. Coffee can be refined, but can- and labs ventional crops, when in fact they are high-tech nabis offers more possibilities. crops. When cannabis goes through manufac- turing processes, it comes out as pure medicine. The international medical cannabis market could be- I look forward to this development. This direct come a USD55.8-billion market by 2025. How can this dialogue with the government is a great way to goal be achieved? BIO convey what we need and why we need to com- Colombia can have a significant slice of that mar- Rodrigo Arcila Gómez is ply with legislation. Although Colombia has new ket, thanks to the market’s worldwide growth. an industrial economist with postgraduate degrees leadership, we need legislation that looks com- We are confident after seeing how other compa- in marketing, financial prehensively at the development of cannabis cul- nies do it. In Colombia, companies promise they management, and development tivation and processing. We can generate much will implement advanced technology available economics, and is a doctoral candidate at the faculty of more profit, especially if we can harness THC and in other countries such as Canada. One of the economics of the CBD derivatives. comparative advantages that Colombia has is its of Belgrade. He has acted efficient workforce. We do not need to use au- as a consultant for both the What is your perspective on the growth of the industry, tomated systems. The development of medical, private and public sector for over 13 years and is taking into account the latest report from the Ministry of non-psychoactive, and industrial cannabis will currently chairman of the Justice that says there are 247 licenses for more than be an immense opportunity for Colombia. We board of the pharmaceutical 60 companies in the country? must think about dietary and nutritional supple- chamber, ANDI. He has served as executive president of The licenses saw peak growth after the change in ments as well. There are many fields to diversify Asocolcanna since January government. People believed the Duque govern- into. ✖ 2018. 6 Medical Cannabis Latin America & Caribbean Special Report SPOTLIGHT FEATURE Key players SPOTLIGHT FEATURE SPOTLIGHT SPOTLIGHT FEATURE SPOTLIGHT Image: Khiron Life Sciences Corp.

AN OPPORTUNITY High-profile advocates are playing a key role in helping the medical cannabis sector overcome stigma.

o get to where the industry is today, medical cannabis has had to overcome T mountains of legal obstacles and societal stigmas. While there is still much work to do in this regard, the following interviewees are at the forefront of this battle at the regional and global level. Whether it is in Oakland, California, or communities affected by illicit trade in Mexico or Colombia, these community and political leaders see medical cannabis as an opportunity to positively impact their local communities and national economies.

Vicente Fox Steve DeAngelo Juan Manuel Galán FORMER PRESIDENT FOUNDER, FORMER SENATOR, OF MEXICO, LAST PRISONER CONGRESS MEMBER OF BOARD PROJECT OF COLOMBIA OF DIRECTORS, KHIRON LIFE SCIENCES CORP. Contents 7 INTERVIEW experience MATTERS

As an experienced political leader, SPOTLIGHT FEATURE

Vincente Fox knows the high price paid SPOTLIGHT FEATURE by previous generations for the . His advice for political leaders? To see the industry as a job generator that can bring prosperity.

Vicente Fox FORMER PRESIDENT OF MEXICO, MEMBER OF BOARD OF DIRECTORS, KHIRON LIFE SCIENCES CORP.

You have said the medical cannabis market in Latin government has to develop the best framework to America can reach USD12.7 billion, and Khiron will play develop the sector. Regulating an important role in that goal. What are the main keys to medical achieve those goals? What can be done to make legislators understand the Whatever the size of the market, Khiron will be potential that medical cannabis could have for a coun- cannabis the first company in the market in Latin Amer- try’s development? industry can ica because it has high ethical standards. That is We are working and waiting for legislators to make generate why Khiron has decided it only should partici- their decision. There is a ruling that they cannot new private pate in the medical market with high compliance escape from. The executive and legislative branch- standards. Khiron has established higher compli- es have been forced by the judiciary to regulate investments ance goals than those required by the regulators. the industry. In Mexico, congress has requested Second, Khiron’s operative strategy is based on additional time to pass the bill to establish a regu- a package; the firm sells a complete service that lation, and that timeframe expires in April. Strong includes a medicine recommended by the doctor, and it is prescribed by a personal physician for What is your forecast in terms of economic and political regulatory each individual patient. Khiron is acquiring clinics terms for the industry? bodies will to provide its services with doctors and patients. Currently, access to banking is extremely restrict- help banks Then, the accountability standards in Khiron are ed. We will gradually see more openness. The open financial extremely high. This is a public company listed problem is that in Latin America we have seen the on the Toronto Stock Exchange, and, as a result, violence triggered by narcos and cartels due to the mechanisms it is obliged to meet certain standards. And finally, prohibition of drugs. We need to have strong reg- to medical the professionals at Khiron, including myself, are ulatory bodies so that banks will open their finan- cannabis great professionals in their fields, so the company cial mechanisms to this industry as they do with industry will acquire a large market share whatever the size other industries. No one will impede the develop- of the market. ment of this industry.

The Colombian government wants to boost the medical What would you say to the regional leaders to have a dif- BIO A graduate of Iberoamericana cannabis industry, but the issuance of licenses is slow. ferent perspective on drugs? University, Vicente Fox gained What decisions should the government take to speed up I would recommend they learn the history of this a bachelor’s degree in business the development of this industry? industry; none of the places that have legalized administration at its campus in Mexico City, and a diploma There needs to be mutual trust between the gov- cannabis have experienced any problems. There in senior management taught ernment and private sector. Companies and the have not been risks for governments and political by professors of Harvard industry will grow tremendously when there are leaders when things are properly done. We have Business School. In 1964, he joined Coca-Cola Mexico as a regulations that are not excessively restrictive, to walk this road to develop it. We have to tell gov- route supervisor. He eventually but rather a legal framework that understands ernments that it is better to legalize, instead of all became regional CEO of the the market’s needs. That relation is well under- the costs associated with diseases and criminality company for Mexico and Latin stood in Colombia and in Mexico. The company related to drugs. Regulating the industry can gen- America, the youngest person to hold such a position in the is in talks with congress and legislators. In Mexi- erate new tax collections and private investment firm. In 2000, Fox became co, congress is about to pass a law that will regu- in R&D. The cannabis industry is a potential job the 55th president of Mexico, late these products. We are on track to have that generator and is an important industry to devel- serving until 2006. Since 2018, he is a part of the board mutual trust. Companies have to comply with op. I would like to invite political leaders to make of directors of Khiron Life transparency and regulation standards, while the decisions in that regard. ✖ Sciences Corp. 8 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

the HIGH PRIEST “You can grow decent Harnessing cannabis’ medicinal cannabis almost anywhere properties and potential is in the world. But when essential for sustainable growth of the industry. a community has multi- generational experience SPOTLIGHT FEATURE SPOTLIGHT

SPOTLIGHT FEATURE SPOTLIGHT with cannabis use, it affects the value system.”

Steve DeAngelo FOUNDER, LAST PRISONER PROJECT

How would you characterize the current perception of for industrial purposes is. Jamaica does not have medical cannabis from both a political and social view- enough flat land to grow industrial hemp. As it is 1ha of hemp point in the region? a small island, there would be no way to prevent sequesters 4MT There has been a tremendous amount of progress the pollen from that hemp spreading around the over the last few years, especially in Chile, Co- island. The last thing we want is Jamaica’s pre- of atmospheric lombia, and Brazil. However, I want to see more cious and ancient strains of cannabis to get con- carbon physicians in Latin America being educated about taminated. But Colombia has some great places cannabis as a potent therapeutic tool. For exam- to grow hemp. What is more, when you harvest a ple, in Colombia there is a great deal of excite- hectare of hemp, you are sequestering four met- ment about the financial and economic potential ric tons of atmospheric carbon. Then, if you make To stay of cannabis. However, there is not much empha- hemp into hemp concrete, it sequesters addition- competitive, sis on providing it as medicine to Colombians or al carbon as it dries. Hence, even without think- local companies on educating Colombian doctors about medicinal ing about all the things we can make out of hemp should create cannabis. Once that happens, it will be a catalyst (plastics, paper, textiles, food, fuel, and construc- for further reform. tion materials), just growing hemp is a great way brands that to dial down global warming. harness their Jamaica wants to leverage its medical cannabis poten- unique cannabis tial, but there are around 100 players regionally invest- What is your outlook for 2020 both for Harborside and ing in the industry today. What should the local industry the global medical cannabis sector? culture focus on to remain competitive? Harborside has some exciting things coming up. Jamaica's competitive edge is that it has one of One is that the city of Oakland has given us a con- the oldest, most mature, and wise cannabis cul- sumption license. We are looking forward to see- tures on the planet. You can grow decent can- ing what cannabis is like in a public, social space. nabis almost anywhere in the world. But when a We will also open new locations in California,

community has multi-generational experience one of which will be one of California’s few drive- BIO with cannabis use, it affects the value system. Ja- through dispensaries. In 2020, I hope countries Steve DeAngelo is a pioneering maica's competitive strength is to share that cul- such as Colombia that are now catering to phar- cannabis entrepreneur, ture, which is about a reverence for life, nature, maceutical companies understand that there is a activist, author, and on-screen personality. He co-founded and each other, and preserving the planet for fu- different pathway for developing cannabis medi- several iconic cannabis ture generations. Not to mention the art, music, cines. The traditional pharmaceutical approach is businesses and organizations: food, and Rastafarian ceremonies that Jamaica to take a substance and break it down into its sin- Harborside, one of the first six dispensaries licensed in the has created out of its cannabis experience and gle molecule component parts. This is expensive US; Steep Hill Laboratory, the culture. The question is how to take that cultural to do, and when IP rights are granted, it makes first dedicated cannabis lab; legacy and transform it into a commercial oppor- it difficult for anyone else to do the same thing. the Arc View Group, the first cannabis investment firm; and tunity. One way to do this is to create local brands The product ends up being expensive and having the National Cannabis Industry that reflect the country’s unique cannabis history a whole range of horrifying side effects. There is Association, the industry’s and culture. an alternative with cannabis. Instead of taking the first trade association. He whole plant and breaking it into pieces, we can currently serves as chairman Emeritus of Harborside Inc, a What do you see as the best way to balance the strong breed strains of cannabis with desired chemical vertically integrated California- growth potential of medical with profiles and do a simple whole plant extraction based cannabis company. In environmentally sustainable practices? of that medicine. This is far less expensive, so this recognition of these pioneering accomplishments, DeAngelo Growing medicinal cannabis is not going to have medicine will not only be for wealthy people but has been called “father of the as much of an environmental impact as growing it for everyone who needs it. ✖ legal cannabis industry.” Contents 9 INTERVIEW SPOTLIGHT FEATURE BIG GREEN SPOTLIGHT FEATURE fighting machine

The cannabis industry has a hard battle ahead to change its reputation, but with R&D and legislative change, the industry can offer opportunities to Colombia’s forgotten.

Juan Manuel Galán Why is a constructive dialogue between the government ing medical cannabis for 10 years before going on to FORMER SENATOR, and private sector key to the development of medical can- recreational use. CONGRESS nabis? OF COLOMBIA This is a new industry that has a complex repu- How would you compare Colombia's framework to other tational challenge. We are coming after decades countries in the region trying to establish a medical can- of prohibition. This substance has caused many nabis industry? deaths in Colombia because of the war on drugs. Few countries have strong regulatory institutions We just started a debate on changing the framework for this industry. Apart from Colombia and Chile, we have been following for 50 years. We are trying to I have my doubts. Argentina, Venezuela, Ecuador, open up debate on new policies dealing with public and Peru need to strengthen their institutions, and I “There is health, human rights, access, quality, security, and do not know if they are prepared to have the institu- a major fair prices. The industry should bring its resourc- tional framework needed for the industry. If the US es together as a team to address this reputational addresses the industry at a federal level, it will facili- opportunity challenge. They should invest, for example, in track tate issues the industry is dealing with, especially fi- here for rural and trace, a fundamental aspect in building trust nancial and banking, which is stopping the industry. among regulators, patients, and doctors. The indus- areas and the try should also invest in scientific research, building What impact will this industry have on boosting employ- agricultural alliances with universities and medical societies and ment, on the overall economy, and Colombians’ mentality? making significant progress in scientific evidence There is a major opportunity here for rural areas and sector, so people can approach this substance with a new the agricultural sector, which have long been in cri- vision. sis. We have been concentrating on cattle ranching, which have but with climate change, it is now one of the worst long been in What is your perspective on the growth of the industry? things you can do. Since we invented the flour in- Colombia has a perfect opportunity because of its dustry in Colombia, we have not invented anything crisis.” geographic position and proximity to the equator. new. We have an extractive emphasis on all we do, We have the sunlight that other countries do not. with no added value or technology transfer. The As the son of a political leader who was assassinat- medical cannabis industry can provide this oppor- ed because of the war on drugs, I politically favor tunity to the country, giving advantages to rural ar- promoting this debate and presenting legislation. eas. This, however, is a cultural process that takes time; BIO it is important to treat this product like a pharma- What is your perspective for the industry in 2020, and what Juan Manuel Galán was senator of the Republic of ceutical product. Right now, everyone wants to be will be your next role in the senate in the process of legal- Colombia for three terms, a billionaire by growing cannabis. In a couple of ization? from 2006-2018. He studied years, only those with quality, good manufacturing If the US federal government moves, it will expedite political science at Sciences Po, Paris. In addition, he holds a processes, access to Europe, and track and trace changes everyone is waiting for. I am in favor of reg- master’s in international politics are going to survive. There are going to be chang- ulating all drugs. I am against prohibition and the from École des Hautes Études es in this industry, and Colombia has the right ap- war on drugs. Drugs have predated humanity, so we Internationales (HEIP). He proach, beginning with medical cannabis, which have to create a less problematic relationship with was the author and rapporteur of the law that regulates the is the highest standard. After that, we can move on substances. Regulating coca leaves is the next step use of medical cannabis in to recreational use, keeping with a high standard of for us, as it is at the core of Colombia’s cocaine busi- Colombia. He is currently regulation and trust. Some countries have regulated ness. If we deal with coca cultivation and business, seeking to revive the New Liberalism, a party founded by adult and medical use at the same time, which is a we can make a huge step forward in changing the his father in the 1980s. little chaotic. Colorado took the approach of regulat- absurd . ✖ Medical Cannabis Latin America & Caribbean Special Report Image: PharmaCielo 2027 PREDICTED LEGAL CANNABIS SPENDING ACCORDING TO TYPE (USD MLN) SOURCE: CANNABIS INTELLIGENCE BRIEFING

MEDICAL

Brazil 362.8 Argentina 122.7

Uruguay N/A

Peru 48.2

Colombia 17.6

Chile 6.5

RECREATIONAL

Brazil N/A Argentina 169.6

Uruguay 48.7 Peru N/A Colombia N/A Chile N/A

NUMBER OF LICENSES ACQUIRED IN URUGUAY BY TYPE SOURCE: INSTITUTE OF REGULATION AND CONTROL OF CANNABIS (IRCCA)

Psychoactive 8 cultivation Non-psychoactive 37 cultivation Industrial 8 Research 17 Purchasing 39,009 pharmacies Pharmacies 16 Domestic cultivation 7,817 Cannabis 4,281 club members Cannabis clubs 145

PREDICTED 2028 MARKET VALUE IN SOUTH AMERICA BY TYPE (USD) SOURCE: PROHIBITION PARTNERS LATAM CANNABIS REPORT

Medical 8.5 BLN Recreational 4.2 BLN Industrial 13 MLN Image: Xxx 01 CAN-NABIS YES WE increase toaround 80countries(upfromaround Sciences, predict theglobalmedicalmarketcould Lewis, executordirector ofUruguay’sFotmerLife medical use—industryexperts such asJordan have decriminalizedtheplant or legalizedits Israel, South Africa,and a few other countries is farbehind—outsideofEurope, onlyAustralia, Brazil, andMexico.Thoughthe rest oftheworld in Chile,Argentina,Peru,Colombia, Paraguay, since beenfollowedbylegalizedmedicalregimes legalizing the plantin December 2013,butithas to none. Not only did Uruguay lead the planet in as acriticalmass,LatinAmericastandssecond galization of the plant just aroundthecorner), tle inthelegalizationbracket(withMexico’sle global medicalcannabismarket. gives theAmericansarunfortheirmoneyin ing therightlinesofbusinesstoensureregion market—firms across Latin America are cultivat the nichefutureofcountry’sUSD10-billion work inventingthenextedibleorCBDoilpen— creative andentrepreneurialmindsarehardat purposes. However, while many of the US’ most now permit cannabis consumptionformedical legalized fullrecreationaluse,whileanother23 US statesandtheDistrictofColumbiahavenow swathes ofLatinAmerica.Inaracetothetop,10 bis consumptionandproductionacrossvast in theUSandlegalizationofmedicalcanna eralization ofrecreationalcannabisconsumption L Though NorthAmericamightclaimfirstman- Cultivating Business mercial, anddietaryrevolutions:thelib precipice oftwoenormoussocial,com atin Americancountriesstandatthe - - - - - grants preferential treatment to the remaining which eliminates 93%oftariffstotheEUand cent EU-Mercosur trade deal passed in July 2019, cosur tradingblock,especiallyin lightofthere Australia: Uruguay’scriticalplace withtheMer they can. This needn’t, however, extend as far as the world—mustseekeveryexport opportunity liberal andhavingahalf-decade headstarton es suchasUruguay—namely being culturally domestic users,countrieswithnicheadvantag 100kg permonthgoingforward. it is also expected to begin exporting more than first-such shipment in LatinAmerican history— ing patientsinAustraliaSeptember2019—the levels ofactiveingredientTHCtoeagerlywait it exportitsfirst10kgofdriedflowerwithhigh with seedcapital of USD7 million,notonlydid Montevideo. Anoperationthatgotofftheground greenhouses inNeuvaHelvecia,120kmwestof cultivating 35,000plantsatits18industrial-sized of these lucky firms, already has 80 employees to 2,000kgofdriedflowerperyear.Fotmer,one another fiveproducerstocommerciallygrowup 2019, thecountrybeganissuingapplicationsfor grow commerciallythrough2018—inFebruary only twocompaniesweregivenpermissionto that yieldednomorethan17annualounces,and individuals couldgrowuptosixplantsathome with arelativelystringentcultivationregime— ing on this opportunity? Though Uruguay began market inthenextdecadealone. 30 today), creating a more than USD100-billion With amarketofmerely3.3millionpotential How haveUruguayandothersbeencapitaliz Cultivating Business - - - - - 11 12 Medical Cannabis Latin America & Caribbean Special Report

“While many of the US’ most creative and entrepreneurial minds are hard at work inventing the next edible or CBD oil pen, firms across Latin America are cultivating the right lines of business to ensure the region gives the Americans a run for their money in the global medical cannabis export market.”

7%, will prove hugely importantly if and when the most medical cannabis investment in Latin medical cannabis comes within the trading bloc’s America. Bodies such as the Colombian Medical purview. Cannabis Industry Association (Asocolcanna) Not only will this open up the Brazilian market are doing everything in their power to expedite to Uruguayan producers, it will also allow access this process: the group’s 29 members have in- to the two trade blocs’ 780 million consumers. vested over USD600 million in growing facilities Foreign investors are keenly aware of this. In De- in three years alone, with ambitious firms such cember 2018, for example, Uruguayan President as Colombia-based Clever Leaves aiming to be- Tabaré Vázquez inaugurated a USD12-million come the world’s largest medical cannabis com- laboratory owned by Canada’s International pany by 2021. Cannabis Corp., while Toronto-based Khiron However, these ambitions are hardly limit- Life Sciences continued its long march toward ed to Colombia. In December, Brazil’s Agência market dominance by acquiring Uruguay’s Net- Nacional de Vigilância Sanitária approved reg- taGrowth, which held one of Uruguay’s coveted ulations for the sale of medical cannabis-based few production licenses, thus boosting the Cana- products in the country, but not its cultivation. dian firm’s production capacity by an additional Meanwhile, lawmakers in Mexico are debating 120 tons. whether to legalize the production and con- Uruguay, however, is hardly without compe- sumption of medical cannabis. What’s interest- tition. Since former president Juan Manuel San- ing is that whether or not they jump on the legal tos legalized medical cannabis in 2016, Colom- bandwagon, the race for the great green hope is bia has been in sharp pursuit of drumming up already on. ✖ Cultivating Business 13 Image: Gaia Health 14 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

CLINICAL healing

In its creation of a holistic care center and expanding its Kuida cosmetic product line in the UK and the US, Khiron is fulfilling its promise of bringing high-quality health products to its clients.

Álvaro Torres CEO & DIRECTOR, KHIRON LIFE SCIENCES CORP.

Khiron recently became the first Colombian company to cannabis can be a good medication for certain con- Cannabis could export a cannabis-based cosmetic product, Kuida, to the ditions and demonstrate that integrated care can be a major US. What does this milestone mean for your company? create a strong relationship between Khiron and its It means we are able to deliver on what we have patients. component of promised to our investors, which is important at this integrated care point in our industry’s development. Now, it is about What are your current expansion plans in Latin Amer- building credibility with investors. Our focus is now ica? on distribution, sales, channels, and investment, In 2020, we want to focus on countries where favor- so we can grow our business in the US. Hopefully, able regulations are in place. That means Colombia Colombia is our investors will look at the sales volumes of Kuida is our number-one priority since it is closest to legal- Khiron’s number- products and see if we can achieve the promise of izing cannabis and ensuring we can start prescrib- one priority a global brand. In other exciting news, the govern- ing. In Mexico, there are still many steps needed to ment is changing its hesitant stance on THC-based be able to sell. Our focus is on delivering what we products. It is good to know that the government is promised patients in Colombia and focus on our finally moving ahead and realizing it needs to meet Kuida sales in the UK and the US. Finally, we want the milestones investors are waiting for. Getting the to continue our process of understanding which THC quota in order is positive and means we can countries in Latin America are ready for the sale of start growing in 4Q2019. Though the government’s medical cannabis. We will focus on execution until approval for THC-based products was important, we that time. It is good that we have created an image of now have to work on getting the quotas for 2020. Khiron that will stay for a long time due to our invest- ments in getting our name out to doctors. Good ex- BIO You plan to build a clinic called Zerenia. Can you tell us ecution across the board will have a big say in 2020. Álvaro Torres has over 15 years about the model for the clinics you operate? As for the industry in Colombia, it would be great to of wide-ranging experience in Our company believes in improving people’s quality see more companies on the sales and export sides. the Latin American market. Torres was previously head of life with the applied use of cannabis. That trans- That would show investors and the community that of business development for lates into what we want to build for our clinics, and faith in Colombia was well-placed. Worldwide, one SNC-Lavalin, Colombia, and Zerenia in particular. Zerenia is an integrated care expectation is Canada and its “Cannabis 2.0.” We are was instrumental in growing the company from two management clinic where we consider the trifecta of waiting to see what happens with edibles, vaporizers, people to more than 2,000 body, mind, and spirit. We are treating patients for and so on. At present, “Cannabis 1.0” has not been people over the course of conditions like chronic pain or epilepsy holistical- what everyone expected. If Cannabis 2.0 goes ahead three years. He has overseen the development of projects ly. We believe that cannabis is part of that trifecta; in January 2020, and consumers start buying bever- totaling over USD1 billion, it is not the solution to every problem, but in inte- ages, vaporizers, and topical products, and compa- including the development and grated care, cannabis could be a major component nies start generating good revenues, it will boost the construction of Colombia’s for improving lives. There is nothing like Zerenia in industry. Overall, market dynamics play a role in val- tallest skyscraper. He holds a bachelor’s degree in Colombia or Latin America. We plan to open it hope- uations. Investors are waiting to see those dynamics engineering, a master’s degree fully by the beginning of 2020. It will treat conditions going well before they choose which companies to in engineering from Rensselaer like chronic pain, dermatology, epilepsy, abnormal invest in. Regardless, Khiron has to execute its busi- Polytechnic Institute, and an MBA from Georgetown movements, and sleep deprivation. We hope to do ness plan in Colombia. That’s the only thing we can University. two things through the clinic: show that medical control. ✖

16 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

With 12.1ha producing the finest THE BEST cannabis products for markets everywhere, PharmaCielo is going of both sky high. worlds

David Attard CEO, PHARMACIELO

Total growing space is What is the scale of your Colombian operations? government introduces new legislation. We have Along with our own growing farm, we contract sev- completed shipments to Switzerland and begun eral local partners to grow product. We currently shipping introductory batches of product to various 15 have 12.1ha under cultivation, yielding a half-mil- parts of the world, such as Argentina, Italy, and the million sqft lion flowers, and have the capacity and connections Czech Republic, among others. to scale up to 139ha and 5.5 million flowers. We have more than 180 cultivars in our seed bank from which How would you characterize PharmaCielo’s business Annual flower we have developed 30 proprietary strains licensed model? capacity is for commercial cultivation, one of the mandatory We are focused on the B2B market. We aim to pro- requirements of the Colombian regulatory structure. duce the finest and most cost-effective cannabis Having used a temporary extraction facility for the ingredients—primarily CBD for now—and sell it 5.53 past three years, we are about to open the doors of a to companies who will use our ingredients to make million kg 2,300-sqm, GMP-certified processing and extraction consumer-ready formulations. We see ourselves center, where we will process oils at full scale. Once as the aloe vera of the cannabis industry. In other we become fully operational, we plan to produce words, we supply a top-notch ingredient that other Uses 2,500kg of oil per month, or 30,000kg annually. companies can put to a variety of creative and bene- ficial uses. A single kilo of our oil translates into 3,000 How do you control the quality and mix of ingredients in to 5,000 SKUs, making it an attractive proposition for 5 your products? companies that develop consumer-ready formula- reservoirs of natural We have an excellent team of botanists breeding tions, particularly when complemented by the Phar- rainwater for growing the strains, using natural irrigation and pest-control maCielo Inside branding that they can license as a purposes techniques. Our breeders have been able to develop statement of quality to their products. cultivars with specific qualities and proportions of THC and CBD. Our local growers have deep exper- Why did you choose Canada as your headquarters? tise. These are people who grew up cultivating and Canada has high standards of financial accountabil- they have it in their blood. They treat the soil like a ity and oversight. Canada’s well-regulated banking BIO living organism and use no chemical pesticides or system makes it easy to conduct business, and cap- Before taking the helm at contaminants, resulting in healthy and safe plants ital markets in Canada made it possible for Pharma- PharmaCielo, David Attard worked as a strategist for and oils. Most cannabis oils are yellow, but our su- Cielo to go public. By blending Canada’s strengths PC Financial, helping the perior growth conditions yield antioxidant-rich oils with our core competencies in Colombia, we’ve organization scale up and with a reddish tint. taken the best of both worlds. In all, we view Phar- deploy its numerous consumer offerings. But engagement maCielo’s “dual citizenship” as one of our strongest and casual conversation PharmaCielo has recently begun selling in the B2B mar- assets and differentiators. with a fellow parent—who ket. Can you give us some details? happened to be a cofounder of Where do you see the company going in 2020? PharmaCielo—piqued Attard’s 4Q2019 is when we flipped the switch to sales mode interest, and an invitation to and announced a medicinal CBD sales agreement 2020 is our breakout year. We have devoted the past join PharmaCielo’s board of with a US distributor that started with an initial ship- three years to fine-tuning cultivation and extraction directors soon followed. By the ment of 1,000kg, and plans for continued volume and are ready to turn our attention to producing and time PharmaCielo went public early 2019, Attard’s knowledge shipments. In early 2020, we announced distribution selling our products. We will offer a range of oil prod- of the business, coupled with within the EU and ongoing discussions with a variety ucts including a pure CBD oil, a broad-spectrum oil his deep experience in scaling of additional global markets that would complement with THC removed, and a water-soluble CBD oil. up business operations, made him a logical choice for the both, including Mexico where we have an existing Given our low costs, we anticipate a profit in our first position of CEO. venture and will be able to act as soon as the year of commercialization. ✖ Cultivating Business 17 FOCUS Social impact Image: Clever Leaves Image: Clever THE DEEPER THE ROOTS Governments and private sectors have a unique opportunity to make an unprecedented social impact with progressive and inclusive medical cannabis cultivation policies.

ACROSS THE GLOBE, the cultivation of illicit crops has been a blight whom are heads of households, Clever Leaves is not only the largest manipulated by organized crime that often exploits economically vul- employer in Pesca-Boyacá, but one of the only ones offering formal nerable local populations. This has exacerbated the stigma attached employment, and thus benefits and a living wage, to its employees, to such products and has unfortunately helped lead resistance to le- 44% of whom are from the municipality of Pesca. In addition to of- galization initiatives. However, many legitimate businesses are keen fering professional training and English courses to its staff, it is also to pursue cannabis cultivation for its medicinal properties, not merely serious about the environment. Around 75% of the water it uses comes for economic gain, but also not only for the plant’s tremendous po- from rainwater and the sophisticated methods it uses to collect and tential to have a concomitant social impact on the communities that store it, enabling the company to water its operations for up to 90 days cultivate it. without rain. With Latin America’s estimated regional cannabis market worth Canopy Growth, an international firm based in Canada with a large USD12.7 billion by 2028, of which USD8.5 billion could derive from presence in Colombia, has also spent much of the past year increas- medical products, the companies and governments that move the ing its number of female hires, particularly in its operational sector, quickest have the opportunity to reap the biggest rewards in terms of Colombia Country Manager Bibiana Rojas told TBY. Her impact in financial inclusion, agricultural diversification, and gender empow- this field was one of the reasons she was nominated for MJBizDaily’s erment. Indeed, it was the very social, economic, and infrastructural Community Impact award, given the company now boasts a more exclusion in so many far-flung parts of Mexico and Colombia in the than 50% female workforce (compared to having no female operators past three decades that allowed cartels to build states within states as merely three years ago). It also takes local investment seriously, having a means of connecting underserved communities to broader markets pumped more than USD2.4 million into Colombia since entering the for the first time. Now, however, if done responsibly, states have a his- country, a significant portion of which was spent locally. And over half torical opportunity to have nearly as big a social impact with medical of its cannabis purchases have been from local growers. cannabis as previous illicit products once did. Finally, there are companies like PharmaCielo, another Canadi- Thus far, the private sector has done the most to take up the torch. an-owned firm with deep roots in Colombia, that specifically target Take, for example, Colombia’s FoliuMed, which produces six of its communities affected by the country’s half-century conflict to help re- own strains of 15% CBD-grade cannabis whose THC content is below integrate them into the social and economic fabric of the country. Co- 0.2% (as mandated by Colombian law), and 90% of whose employees lombia’s first fully licensed and operational cultivator and processor are single mothers. There is also Clever Leaves, one of Colombia’s larg- of cannabis oil extracts, PharmaCielo is not only racing to become the est cultivators. It already has 1.5 million sqft of greenhouses that ad- world’s largest supplier of medically grown and processed cannabis here strictly to Colombia’s Good Agricultural and Collection Practices oil extracts, but is working hand in hand with with Cooperativa Cau- (GACP) and is expected to have 2.3 million by the end of 2019 and 10 cannabis and its 63 local regional farmer members in the Cauca De- million by 2021. partment to help the Arhuaco people and other local groups recover But it takes its employees, key stakeholders in the firm’s success, from decades of violence in the region through a medium they know even more seriously. With 63% of its employees female, many of best: the cultivation of some of the world’s finest strains of cannabis. ✖ 18 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW center of EXCELLENCE

By focusing on innovation, FCM Global is at the forefront of helping to create an industry with high added value. “In the supply of cannabis extracts, we define quality as the consistency of the supply of a product with the Carlos Velásquez specifications expected by the CHAIRMAN, FCM GLOBAL client.”

What have been the factors for FCM Global to become oil, which will allow us to standardize processes Finalizing one of the leading companies in Colombia? We are and quality while becoming more efficient and pi- processes a multinational company. In the beginning, we oneering in terms of R&D, which will mean great started to set up companies in North America advantages to our clients. With new technologies, of in-vitro and Europe for the transfer of know-how and to we can create customized material for specific me- propagation and understand how the industry is evolving world- tabolites to create new products. production of wide. Most of our clients are in Europe, which is nano-emulsions a more mature market and has regulations that Where do you see the relationship between production are clearer; however, as the framework in Colom- in Colombia with distributors and end customers around bia evolves, no other jurisdiction in the world has the world? the same comparative advantages, especially now Two things are extremely important here: consis- Working on that the regulators are bringing in a sophisticated tent quality and transparency. If we can demon- know-how framework. Colombia, with the completion and strate to our customers a clear discipline in genet- implementation of the regulatory framework, is ics and consistency from seed and propagation transfer from becoming the catalyst for all the synergies of the to the oil and the final product, then we will truly universities in global market, being the center of cultivation and have an instrument to work in the market. With- Israel, Canada, production, both raw material and final products. out these, it will be difficult to get there. On the and Europe other hand, our partnership with local universi- Being one of the pioneers in Colombia, how has this ties drives innovation and quality are key, as we helped to implement FCM Global’s vision of its “co- are working on transferring know-how from uni- sourced” model with almost 500ha at its disposal? versities like Israel, Canada, and Europe. With an The learning curve has been fairly significant, with R&D base in the hands of local universities and changes and constant developments in regulation acting as an association and not as independent and advances in science and technology around companies, we can create an industry with high the world. We focus on innovating and achieving added value, starting with innovation—process- efficiencies at all levels in the company, from the es, products, and regulation—and creating clin- objectives of our customers, which is what our ical evidence, continuing with a supply of both “co-sourced” model is all about, thus, developing extracts and finished products that are tied to the

BIO these areas in stages. In the two natural sub re- genetics we have in Colombia and distributing Carlos Velásquez is gions, Antioquia and Natagaima, where we have them around the world with credible players and a Colombian-born our licenses and registered cultivars, we cover long-term vision. Obviously, this must be accom- investment professional and approximately 60% of the climatic conditions in panied by rigorous processes and traceability and entrepreneur with over 20 years of experience in the the country. Our best genetics micropropagate in- transparency systems. development of physical and house for future growth, and a sample from this social infrastructure in Latin source is developed for final products using nan- What is your perspective on how the industry will contin- America and Europe across ue to evolve in Colombia? the healthcare, agriculture, otechnology. renewable energy, and real We are positive about the direction the industry estate sectors. Prior to What have been the most important technological ad- is moving in; Colombia is on the right path. It has co-founding FCM Global, vances in FCM? been a long journey, but now Colombia will be po- Velásquez served as a board member for several companies Innovation has been one of our pillars. We are sitioned as a production hub for the world. Even as and previously as co-founder extremely proud of the team we have. As a conse- other Latin American countries open legal frame- of both Fondo AAA and Leaf quence, we are finalizing our processes of in-vitro works, it will mostly be for imports of final prod- Air Renewable Energy Group. He began his career at Grupo propagation and production of nano-emulsions ucts. Colombia will set the standard and be a plat- Argos as a Program Director. both in micelles with areas related to water and form for Latin America to create a new market. ✖ Cultivating Business 19 INTERVIEW

efficient DNA

“2020 will be the year FCM Global is preparing to in which we began our enter capital markets to obtain expansion. Then, the company the funding for its ambitious expansion plans. will deliver enough production to the market at around 250kg per month.”

Alejandro Marín CFO, FCM GLOBAL

How do you develop a company in a non-traditional sec- have allowed us not only to innovate but to edu- tor in which banking institutions are still in the process cate and train all members of the organization at Looking of developing financing products? each level of the same. strategically at Basically, there are four paths, all of them based on the resources that the founding partners must How do you involve the investors to improve the opera- stock markets provide “skin in the game” in a meaningful way, tions of the company? though that take different aspects. The first is by As a private company, we make the decision to developing a funding strategy in the capital mar- focus on the business and investment ecosystem Growing kets. The second aims to create an asset and then of the founding partners, who collaborate strate- sell it. Investors of such strategies quickly sold gically to consolidate the goals and share in some financially out when they saw it was extremely complex to way the benefits of the medical cannabis indus- healthy create something of value. The third focuses on try, but also have a relationship of trust with the professional investors such as venture capital company and its partners. We know each investor funds or private equity funds that have opened personally, and they also go through demanding their investment criteria to this new industry, compliance processes before joining as share- Pointing to an and the fourth is due to seek leverage with pri- holders. Beyond that, we try to create value of expansion that vate investors. FCM has developed a strategy to the company and achieve other items. When we will benefit link close investors from “family and friends” to compare the benchmarks with other companies, many “family offices,” with which we also seek people we calculate the value of the company. In the last who have accompanied us in other investments, 1.5 years, investors obtained a high valuation for benefitting from the development of FCM in the stocks between March 2017 and September 2018, short, medium, and long term, depending on the which was 96% of the valuation of each stock. criteria of each one. It is essential to gain access to credit products in the financial system, both What are the growth perspectives for FCM Global? local and international for Colombia, and that The main milestone of 2019 was starting sales with the current efforts of institutions, they will of our products, namely high-quality extracts. be able to achieve success in the medium term. However, 2020 will be the year in which we be- gan our expansion. Then, the company will de- What has it meant to FCM to remain as one of the private liver enough production to the market at around companies where large private capital participates? 250kg per month. Moreover, we want to go be- BIO Alejandro Marín has Essentially, we have developed efficient DNA. yond that and enter capital markets to obtain participated in the creation Our efficiency has been able to positively impact the funding to develop our total expansion plan and management of private the company, from its operations to financial as well. This expansion plan has a budget of equity funds in Colombia and Nicaragua for the US, as indicators, achieving production costs of plant USD120-130 million. This should lead us to have director of Capitalia Colombia, material and final extracts well below market av- more than 200ha in production in the 2,024ha we Fondo Microcapital, and Fondo erages. This undoubtedly has an impact on the currently have licensed, leaving more than 270ha Inversor. He created the generation of attractive profitability margins for available. This generates more 6,000 direct jobs second-largest network of angel investors in Latam and our investors, which protects us with sufficient and revenues of over USD300 million annually. was on the boards of more than anticipation of the price movements of cannabis We provide base salaries at least 30% higher than 30 companies. Marín holds a extracts. The pillars to reach these achievements the standard in Colombia, and we are an excel- business degree from EAFIT University and a specialization and to project a healthy company in the long lent vehicle to bring development and formal in finance and marketing from term have been research and technology, which economic well-being to the field. ✖ the University of Medellín. 20 Medical Cannabis Latin America & Caribbean Special Report VOICES FROM THE SECTOR

Mauricio Krausz DIRECTOR OF REGULATORY AND GOVERNMENT AFFAIRS (COLOMBIA), PLENA GLOBAL HOLDINGS INC.

What has the impact been of your social responsibly programs, such as your community medical cannabis education and English language programs in Colombia? Medical cannabis is a new industry with a strong presence in Colombia, giving it a great op- portunity to invest in the communities it operates in. When Econnabis went into Nemocón, a small town north of Bogotá, it was a conservative community that traditionally focused on flower growing, salt, and coal mining. We first met with community leaders to find out their needs. The first issue that arose was their fear of cannabis being grown in the community. Borja Sanz De Madrid Therefore, we started with a basic education program on medical cannabis to give them the GLOBAL OPERATIONS DIRECTOR, tools to understand this industry. We wanted them to understand that they were helping to PIDEKA create medicine. The second program we did was teach English, a program that began as an internal four-month English program for our staff. We offered this English-as-a-second- One thing that sets PIDEKA apart is the way language program to the wider community in Nemocón, starting with community leaders. it is designing its growth operation, which will be the largest indoor operation in the country. As one of the first companies certified in the medical cannabis industry, how have your B2B ser- What advantage does this give you? vices for the industry developed? PIDEKA is the first and only indoor-li- We are acting as suppliers to other companies and hold active conversations with compa- censed producer with a tissue culture nies worldwide. We are learning where we can create partnerships. In terms of products, we laboratory and solvent and solvent-less are a raw material producer. For the first time, we are going to be producing isolates, distil- extraction labs to be EU-GMP-certified in lates, and full spectrum extracts for the medical market in Colombia and abroad. The clear- Colombia. Indoor facilities allow absolute est pathway to the market is to have EU-GMP certification, the highest quality standard to control over all variables such as moisture, date, but it takes time and money. We are in the process of cultivating Good Agricultural temperature, lighting conditions, nutrition, and Collection Practices of Medicinal and Aromatic Plants (GACP) standards, which is the and every other possible consideration first step for the EU-GMP certification. in terms of variable control. It is the most efficient way to produce high-quality and consistent medical-grade product, and is the only way to have consistency in canna- binoid and terpene concentrations due to standardization of production. Bibiana Rojas COUNTRY MANAGER, What role has PIDEKA played in the develop- CANOPY GROWTH ment of the cannabis sector in Colombia? PIDEKA is focused on the development What is coming up for product development in Colombia? of research processes with a model of 20 In 2019, our farm operations advanced in support of genetics registration and an initial plants, which was what the law allowed at commercial crop. Furthermore, we signed an agreement with Procaps, supporting our the time. It served to generate a pilot study objective of producing high-quality goods to serve the regional market. Globally, we have with patients of different symptoms sup- been heavily focused on R&D and education. One of our key pillars is quality, which starts ported by health professionals with whom with raw materials and standardized genetics. The second pillar is science; we are engaged we were able to collect a database that in 15 clinical studies with people around the globe, as well as four clinical studies with ani- served to prove that cannabis had medic- mals. Our third pillar is experience; Canopy has been in the cannabis industry for five years, inal uses. Thanks to this, we were able to and it has over 100,000 patients. contribute knowledge and share it with the sector, thus generating an industry that was The company has invested USD100 million to meet the medical demand of countries in Latin additionally leveraged by emerging regula- America. What are your ambitions for 2020? tions. PIDEKA was the sixth company in the A major part is completing construction at our facility, including for the greenhouses and country to obtain a license in 2015, and we construction plants. The extraction capacity will be significantly larger to ensure we can were re-certified again in 2019. cover the supply for Latin America for the next five years. It starts with doctors, patients, and the community. We are going to conferences and congresses and helping develop spe- What is your development strategy for a mar- cialized courses for doctors. In every Latin American country, we are working with univer- ket that is growing more competitive? sities such as the National University of Colombia, Universidad Peruana Cayetano Heredia The main strategy is to achieve the stan- in Peru, the University of Concepción in Chile, the University of Buenos Aires, the Univer- dardization of production processes and sity of Panama, and the University of São Paulo. In every country, we have sought to form final product to become competitive in the partnerships with the largest possible university because this is the standard that we will international market, all while positioning bring. I look forward to a time when people can look back and consider Mexico and Co- our products strategically and differentiat- lombia's success cases: countries that lived a sad and violent past and ended up becoming ing ourselves from the competition. leaders in creating wellness and jobs. Cultivating Business 21

Kyle Detwiler CEO, CLEVER LEAVES

Clever Leaves has made extracts that supply the European and Latin American markets. What is the company's vision for the future development of the Colombian and Latin American markets? One can try to imagine what the market will be, but it's important to follow the pulse of the regulatory structure in those countries. We have been operating in Colombia since 2016. Chile has already legalized some -based products. Brazil was almost forgotten given how restrictive its original rules were, but we are excited by the recent regulatory announcements, which present a big opportunity for Clever Leaves. Brazil has indicated a ban on domestic production; distribution will likely occur at pharmacies, and all products will require GMP-certified producers. We are tracking the implementation of Brazil’s an- nounced regulatory structure and are cautiously optimistic about 2020. Because of Clever Leaves’ roots in Colombia and its desire to help patients globally, we will try to participate, if not accelerate, the growth of the local market depending on how the regulations unfold.

Clever Leaves has a production plant that complies with GMP according to Colombia's National Camilo Villalba Institute of Drug and Food Surveillance (INVIMA). What does this mean for Clever Leaves? CEO, GMP certification from INVIMA goes a long way in terms of providing an outside measure BLUEBERRIES MEDICAL CORP. of the quality of a product. There are limited reliable benchmarks in the cannabis industry to date. Prospective customers or partners understand that GMP certification conveys both Blueberries describes itself as a leading in- quality and consistency in our production. A second advantage of having GMP certification ternational supplier of naturally grown, pro- is that it allows us to enter certain downstream pharmaceutical markets. We are research- cessed, and standardized medical-grade can- ing exactly how many countries may reciprocate GMP certification, but to sell a prescribed nabis oil extracts and related products. Can pharmaceutical product in Colombia, such as a heart medication or sleep aid, the product you tell us about your operations? must contain ingredients produced under GMP procedures. When the Colombian market We focus on extraction and premium quali- opens up, Clever Leaves will be uniquely positioned to capture it. ty. In the region where Blueberries Medical is located, we will find the largest concen- tration of cannabis supply in Colombia, as the state of Cundinamarca has the highest number of licensed producers. We have a 2,800-sqm site in a strategic location in the Diego Navarro Bogotá savanna, where our first extraction CEO & CO-FOUNDER, line started operations in January 2020. We FOLIUMED are working to comply with the EU’s Good Manufacturing Practice (GMP) processes How have FoliuMed’s partnerships and alliances strengthened your position in the market and and procedures. We expect to be EU's GMP helped you reach markets abroad? certified by early 2021. This will be a step- This is very much related to each business unit we seek to develop within the framework by-step development. We will also comply of our business plan. Basically, to supply the pharmaceutical-grade products in Germa- with the Colombian GMP within the sec- ny, we have established a joint venture to create FoliuMed Pharma, with a pharmaceutical ond half of 2020. company based in Frankfurt—Fidelio Healthcare. That company has been in the market for almost 30 years and has a 15,000-sqm facility in Germany to handle controlled sub- Blueberries has 142 registered exclusive can- stances (including EU GMP certification, manufacturing, packaging, storage, and distribu- nabis strains. What is the importance of ge- tion), where we do medical product development with solids, semisolids, and liquid dosage netic R&D for the company? forms. Thanks to this venture, we can distribute those pharma-grade products within Ger- R&D is extremely important to get the right many's pharmacies and drugstores network. So, our business plan focuses on this business product. In Colombia, based on the genet- line of prescribed medicines for the German market, the most highly regulated market in ics available, one must go through the agro- the world for pharma-grade products. nomic compliance approval process. Five of our proprietary CBD strains have already Can you tell us about FoliuMed’s product portfolio for the German market? been approved by the Colombian Agricul- Currently, the market is mainly served with cannabis flower. But in the future, extracts will tural Institute. We are now in the process have a higher market share, and we want to start supplying patients with cannabis extracts of getting approval for additional CBD and for treating patients according to their medical prescriptions through our pharmacy net- THC strains. Having hundreds of strains is work. not what is important; what is critical is to fine-tune the strains to get the best yield, How does FoliuMed’s work in genetics help its position in the market? measured by the content of CBD, THC, and It depends on the product. We already have 10 CBD strains approved for commercial pur- in the future other as well. poses by the Colombian Agricultural Institute (ICA) that have high CBD values and are Our vision is to use no more than five to 10 THC-compliant with US and EU regulations. With these strains we can manufacture both CBD and THC strains. However, having so bulk ingredients and end products in formulations that have high market demand, particu- many registered strains allows us to devel- larly broad and full-spectrum products for consumers. To supply the US market, you must op new business opportunities. use strains that have below 0.3% THC content. So, genetics are a crucial component. 22 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

Johanna Urrego CEO, KURE MEDICAL SOLUTIONS

How would you characterize your investments in R&D ucts. In that sense, the key is to work with stra- and quality control, and as a market, what is Colom- tegic allies that have their own channels of dis- bia's potential as an R&D center for the medical can- tribution and focus on a specific objective. On nabis sector? expansion and internationalization, we have Though Colombia is new to the medical can- different marketing models, which depend on nabis market, companies have focused on R&D the legal and technical requirements of each to obtain safe, effective products, and world- country. wide recognition. In our case, we work on R&D hand-in-hand with medical associations and What is your outlook for the medical cannabis indus- universities, because they have already worked try, both in Colombia and the region, in 2020? with medical cannabis, making this synergy 2020 for Colombia’s cannabis companies will more effective and efficient. Colombia's poten- be a year of consolidation. Companies will be tial as an R&D center for the medical cannabis completing their agronomic evaluation tests sector is huge because it has prestigious clinical and registering their seeds in the National Reg- research institutions, hospitals, and universi- istry of Cultivars of the Colombian Agricultural ties and an excellent infrastructure for labora- Institute (ICA) and starting their commercial BIO tories manufacturing high quality products. crops. The industry will concentrate all its R&D Johanna Urrego is the CEO of Kure efforts and strengthen its network with foreign Medical Solutions. She is a political scientist from Javeriana University and How have your B2B distribution channels evolved as companies, not only Canadians but also Euro- has a master’s in business administration medical cannabis legalization progresses in other in- peans. In the region, there are many countries from the University of Barcelona. ternational markets? working on legalization. It is a call to our coun- Urrego has worked in the commercial construction industry and has an We have realized that the trend of this market is try to keep going, make things well, and focus extensive experience in management. geared more toward customized finished prod- on quality products. ✖ Cultivating Business 23 INTERVIEW leafy HEIGHTS “The medical cannabis GAIA HEALTH is upping the industry offers an competition for Colombia’s alternative, by replacing burgeoning cannabis industry with its use of cryogenesis and social illicit crops with legal crops responsibility initiatives. and well-paid jobs that can guarantee the livelihoods of peasant families.”

José J. Bitar EXECUTIVE PRESIDENT GAIA HEALTH

Can you give us a short introduction about GAIA mass, taking only the trichome concentrate to the HEALTH? extraction process and thereby decreasing pro- By 2020, GAIA GAIA HEALTH is a Colombian company licensed portionally expenses and costs. With this technol- will export to produce cannabis derivatives for medical pur- ogy, there is no need to dry the biomass, thereby poses. It is dedicated to cultivating, extracting, and making investments in equipment, infrastructure, cannabis- developing high-quality products at affordable and personnel for the drying process unneces- based active prices. The company was created with 100% Co- sary. This technology is cost-effective, and the ingredients and lombian capital and with a strategy that includes plant material obtained after the separation of products the highest quality standards with the objective of trichomes is clean and ready for use in cannabis being one of the most competitive companies in fiber-based by-products. the world in its class. How are you contributing to the development of the com- Development The medical cannabis industry is currently becoming munities where you have operations? How do you foresee of medical quite competitive in the country and region. How does the industry’s impact on these regions and the country? GAIA HEALTH differ its offerings to attract investment? The Palmito municipality, where we have op- cannabis will Located in Colombia’s tropical area, GAIA benefits erations, was one of the areas most affected by create positive from optimal temperature and natural light that armed conflict; poverty, fear, unemployment, and growth in job substantially reduces operating and labor costs the lack of basic necessities were part of the daily market and has proximity to ports, both maritime and air. life of its inhabitants. Today, we are contributing A special mention must be made of the approval to change this reality; more than 80% of our em- of the Vallejo Plan, a free zone that translates into ployees are natives of this community. On the oth- significant tax and tariff benefits in comparison to er hand, GAIA will contribute significantly to the other territories. Additionally, it provides social increase of the annual municipal budget through benefits such as employment, decent remunera- taxes, which should be used in public works and tion, and environmental rights for the region and policies. Within its structure, GAIA prioritizes so- its inhabitants. From a technical and technologi- cial and environmental responsibility; we forecast cal point of view, GAIA leads in the implementa- the execution of short- and medium-term projects tion of the fully automated continuous extraction that contribute to the solution of needs such as and processing process from harvest to distillation potable water, education, and food. The develop- BIO and crystallization, in line with EU GMP stan- ment of this new industry in our country will posi- José J. Bitar is an dards. Cryogenesis guarantees the preservation of tively impact the creation of new jobs and national entrepreneurial leader with more than 12 years of biomass quality attributes, which are affected by and foreign investment. A significant increase is experience in the creation and conventional drying and storage techniques. We expected with respect to the short- and medi- management of companies also have a team composed of technicians, profes- um-term exports of these products and imports in the field of exportation of agricultural products, sports sionals, and scientists focused on research, inno- in equipment and supplies that will undoubtedly medicine, gastronomy, and vation, and development at every stage. boost the economy. New technical and profes- finance. He is highly committed sional jobs will be created for the industry, along to social and environmental responsibilities during the Could you explain cryogenesis a little more? with a recovery of confidence in the agricultural execution of any venture. He Through a process with liquid nitrogen, the tri- sector. The medical cannabis industry offers an al- arrived in the cannabis industry chomes of the total biomass are cryo-preserved ternative, by replacing illicit crops with legal crops with a clear objective of at a temperature between minus 130 to minus 180 and well-paid jobs that can guarantee the liveli- creating high-quality medicinal products at a fair price, making degrees Celsius, which guarantees the stability of hoods of peasant families. One of the objectives them accessible to everyone the composition and percentages of cannabinoids of the company is to provide technical assistance, while also improving the quality present in the plant from harvest until extraction. supplies, and technology to small producers so of life for both patients and everyone who is directly or The cryogenic separation of the trichomes reduces that they can develop their crops optimally and indirectly related to the creation the need to manipulate large volumes of total bio- guarantee the purchase of the crop. ✖ of medicinal products. 24 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

two licensed producers and is an expert in extraction.

Why did the company decide to expand into Colombia?

MN There are several clear advantages to growing medicinal . First and most notably is the climate. Our operation is located 1,650m above sea level with abundant sun, 12 hours light/ darkness cycle, and consistent weather all-year round. Second, the climate al- Michael Nistorescu Eduardo Mayorga, lows us to build hybrid greenhouses at C E O , PRESIDENT, a significant cost advantage compared CANNAVERDE PHARMA CANNAVERDE PHARMA to almost every other jurisdiction on the planet. Third, Colombia has a long histo- ry of agricultural prowess, being a world BIO Michael Nistorescu is the CEO of BIO leader in the export of fresh cut flowers, CannaVerde Pharma. He has over 10 Eduardo Mayorga is the president coffee, and bananas. And lastly, the labor years’ experience in capital markets of Cannaverde Pharma. He has over force is not only plentiful, but extremely and asset management. Prior to joining 19 years of experience in strategic capable of allowing us to cultivate medic- CannaVerde, he was investments director management, leadership in HR and at Infinite Potential Management and an HSEQ, and development of projects inal cannabis at a large scale. We believe analyst at Gluskin Sheff + Associates. throughout Colombia. He earned his that these cost benefits will give us a sig- Nistorescu passed all three levels of MBA from Externado University. He nificant competitive advantage. the CFA Program and graduated with a studied strategic leadership at Los Andes degree in economics and international University and management of human studies from York University. development at Rosario University. What’s the competitive advantage of being lo- cated in Bucaramanga?

EDUARDO MAYORGA Bucaramanga is considered one of the safest cities in Co- lombia. There is also a strong academic QUALITY ALWAYS WINS presence here which allows us to find and attract talent and establish collabo- Having obtained all the necessary licenses for the commercial rative research projects with one of the cultivation of medical cannabis in Colombia, CannaVerde Pharma’s most prestigious public universities in goal is to get its greenhouses and extraction and processing facility the country, Universidad Industrial de Santander. Although the climate in Co- up and running in 2020. lombia is generally well-suited for grow- ing cannabis, some areas are better than others. Bucaramanga’s climate makes it an ideal location for our operation. Can you tell us about the company and its op- complete our first agronomic evaluation erations and milestones? in December 2019. How was the JV between CannaVerde and Green Health Col consolidated? MICHAEL NISTORESCU CannaVerde Phar- What is Canada’s expertise in the medical can- ma is a Canada-based holding company nabis industry? EM We believe that people are the most with operations in Colombia through its important asset of an organization. wholly owned subsidiary, Green Health MN Canada became only the second Green Health has an integrated talent- Colombia SAS. We are licensed in Co- country in the world to legalize recre- ed workforce and achieved a fantastic lombia to cultivate, extract, manufacture, ational cannabis, and before that had level of success in terms of navigating domestically distribute, and export both a robust medical cannabis market. We the regulatory framework in Colombia. CBD- and THC-based derivatives. Since are fortunate to have core members that Given Canada’s leadership in the medi- acquiring Green Health Colombia at the have experience working for Canadian-li- cal cannabis space, the team in Colom- end of 2018, we have been able to license censed cannabis producers since the bia valued that CannaVerde had a lot of 7ha for cultivation. We were granted a inception of the legal medical cannabis expertise to offer, not only in terms of THC scientific quota for both cultivation framework in Canada in 2014. Our mas- cultivation and extraction, but also in its and manufacturing of derivatives. We ter grower, Shane Whelan-Stubbs, was ability to raise capital. What really made have built two 10,580-sqft greenhouses a co-founder of one of the first licensed this venture possible was the seamless and are nearing completion of the first producers in Canada and one of the best combination of both teams and the ease of five 60,000-sqft greenhouses. Cultiva- growers in the country. Our chief science with which we have complemented each tion is well underway, and we are set to officer, Dr. Peter Chen, has worked for other’s skill sets. Cultivating Business 25

In Colombia, medical cannabis has been “Cultivation is well underway and we are evolving considerably in terms of regulation. How is CannaVerde taking advantage of this set to complete our first agronomic evaluation situation to become a leading company in the in December 2019.” industry?

EM Colombia currently allows licensed After a successful 2019, how are you planning looking forward to an exciting 2020. producers to manufacture and sell to achieve your goals for 2020? CBD-based topicals as long as the THC What sets CannaVerde apart from the compe- content is below 1%. Furthermore, Co- MN In 2019, we focused on obtaining the tition? lombia is an attractive market in cos- necessary licenses to begin commercial metics, consumer health, and wellness. cultivation of both CBD and THC medical EM We are happy to be a part of this These markets represent up to CAD8.5 cannabis. We are currently taking all our emerging industry that has massive so- billion per year in retail sales. There is a strains through the agronomic evalua- cial and economic potential, not only in lot of anecdotal evidence pertaining to tion. In 2020, our focus will shift toward Colombia, but worldwide. Our focus from the medical properties of CBD. Howev- completing our facilities, including our the start of this venture has been reve- er, we are mindful that not all products initial five 60,000-sqft greenhouses and nue generation and cash flow positivity should contain CBD and as such we are our extraction and processing facility. At to sustain our business for years to come. being selective in the type of products the same time, we anticipate beginning Furthermore, we will strive to cultivate we associate ourselves with. We will be commercial cultivation and extraction, the highest-quality medical cannabis. partnering with companies that already and ultimately revenue generation in This will ensure that we stand behind our have established retail channels and we 1Q2020. We will also be bringing prod- products with pride and will help our con- will be bringing CBD-based products to ucts to market in the early part of the year. sumers become well informed about the markets in Colombia and Latin America We are proud of our accomplishments in benefits of this wonderful plant as well as in 2020. 2019. We are only getting started and are about the active dose needed. ✖

Operations in Colombia CannaVerde Pharma Licenses Licensed for cultivation, manufacture, domestic distributionCanna and internationalVerdePh arma export of psychoactive and non-psychoactive medical cannabis.

Cultivation Ideal climate allows for up to six harvests per year of low cost high quality medical cannabis plants.

Extraction Expertise in extraction and refinement processes utilizing state of the art equipment and facilities.

CONTACT: cannaverdepharma.com [email protected] 26 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

CONTINENTAL synergies “Canada, with its JMCC combines the talent of Jamaican reputation for good farmers with an executive team that governance and has a global business perspective to deal with different legal regimes regulatory excellence, governing medical cannabis. should lead the way in setting robust protocols for the global Diane Scott GROUP CEO, cannabis market.” JAMAICA MEDICAL CANNABIS CORPORATION GROUP OF COMPANIES (JMCC)

JMCC has its corporate offices in Canada and opera- to affordable medicinal cannabis. Some are not Offices in tions in Jamaica. What synergies do the two countries able to get their preferred product. In addition, Toronto, provide? we now have an excise tax that did not previous- We are based in Canada, but all of our opera- ly exist. Our government has yet to acknowledge Montego Bay, tions are in Jamaica. Our teams in Jamaica han- that there is a difference between medicinal and and Hanover dle agronomy, science, testing and quality man- recreational cannabis. Then, there is the import/ agement, and, of course, cultivation. The latter export issue. Canadian companies have been ex- is particularly notable because we believe that porting significant amounts of cannabis to coun- Entered Jamaica Jamaica has both the best growers and the best tries like Germany while there are shortages in natural growing environment in the world. We Canada. Australia has thought this through and in 2016 also harvest rainwater for irrigation as heavy met- decided to authorize exportation only if the ex- als can be an issue in some parts of the island. In porter proved that domestic supply was assured. essence, we scientifically control the best natural Canada needs to recognize that medical products Just under growing environment for our products. Our team from companies like JMCC are a good solution to is truly international. That allows us to overlay the help meet the needs of Canadian patients. Health 93,000sqm of immense talent for cultivation in Jamaica with an Canada is allowing R&D imports to come in and greenhouse executive team with a global business perspective be tested, but in small amounts. Our customers cultivation by and experience in highly regulated industries. So, have several import applications filed at the mo- while a big challenge is that each country we do ment. It is my hope to see Health Canada make early 2020 business in has its own legal regime governing more progress in this area in the short term. A medical cannabis, we have the sophistication and country like Canada, with its reputation for good resources to understand and manage that. governance and regulatory excellence, should BIO lead the way in setting robust protocols for the Diane Scott brings over 20 How would you assess the impact that your operations global cannabis market. years of global experience in have had on the local economy? the c-suite of enterprises in The way to make a lasting impact is by working What are your targets for 2020? global emerging industries to her role of chair and with small farmers. We are members of the We will have just under 93,000sqm of greenhouse group CEO of JMCC. She Growers and Producers Association in Jamaica. I cultivation in 2020. Of that, 80% has already been was named as one of North would like to see this group more empowered, es- sold. Our focus is on increasing cultivation ca- America’s 2019 top female CEOs in the cannabis industry pecially in terms of engagement with small farm- pacity by integrating more small farmers. We also by MJ Business. She is ers. The government has a pilot program now want to participate more in scientific research, a regular speaker on the called the Alternative Development Program de- particularly supporting clinical trials. JMCC has international stage, having recently participated in the signed to include more small farmers, including a charitable foundation in which it reinvests 10% prestigious World Strategic transitioning some who formerly grew for the ille- net profit. In 2018, we had two initiatives: one for Forum, Australia’s Food and gal market before the advent of the legal industry. providing medical cannabis for the FDA Orphan Drug Regulatory Symposium, International Economic Forum Drug trials for a treatment for acute myeloid leu- of the Americas, Bloomberg’s How do you see the growing recreational legality of can- kemia and another to support a scientific study of Elite Players Summit, and nabis around the world impacting medical cannabis? indigenous Jamaican landrace strains conducted Cambridge University’s Old JMCC is 100% focused on medical cannabis. by a consortium of Jamaica’s scientific institu- Divinity School CannTalks series. Scott was also recently Talking about Canada as an example, maybe the tions. We will be announcing more initiatives in appointed as an advisor to the government should have waited another year early 2020. We also plan to begin construction of Center of Medicinal Cannabis, before legalizing recreational cannabis because our Jamaican headquarters in 2020, which will a group working to help shape the UK’s medicinal cannabis with the majority of cannabis going to the rec- include extraction and packaging operations and regime. reational market, patients do not have access office space. ✖ Cultivating Business 27 INTERVIEW

A BUDDING future

Sebastián Salazar Fuentes CEO & FOUNDER, BOTANIKTECH

In a dynamic industry that moves at a rapid medicine for Peruvian patients. pace, what first-mover advantage does Botan- iktech expect to see in the industry? What can you tell us about the licensing and ap- Our biggest advantage is our deep under- proval process in Peru? standing of the cannabis plant and the It is a complex process, with several key regulations related to the cannabis indus- regulation milestones to overcome. This try in Peru. The authorizations we have involves many steps and significant in- obtained as Botaniknow come as a result vestments in compliance with all the re- of this. Being ahead of our competitors quirements set by the Peruvian General and building relations with public insti- Directorate of Medicines, Supplies and tutions involved in the industry is another Drugs (DIGEMID). Regulation in Peru in- As the first company in Peru of our advantages. As the industry devel- volves three main licenses: research, im- ops and regulations are implemented, we port/export and commercialization, and to hold the authorization to are positioning ourselves as the reference production. Only the first two are fully operate as a pharmaceutical point for the cannabis industry in Peru. implemented, while the third is still under company dedicated to cannabis, consideration. We expect this to be ready Botaniktech aims to become the What role does scientific research play in at the end of 2019. Peru is the fourth coun- Botaniktech’s model? try in the region to legalize cannabis. We reference point for the Peruvian Research can provide us with a better have learned from Uruguay, Chile, and cannabis industry. understanding of the potential benefits Colombia. There are two main differences and uses of cannabinoids as well as help in our regulations. Peru defines psychoac- set higher standards of quality. Develop- tive cannabis as cannabis with more than ing healthy synergies with all players is of 1% THC and deems it “cannabis for med- great importance for a budding industry. ical and therapeutic use.” Psychoactive “We have considered the In this sense, we have formed a partner- cannabis does not include cannabis with ship with an organization that is specially less than 1% THC called hemp. This gives possibility of distributing focused on R&D. It brings to the table im- us a different understanding of the reach cannabis across the portant knowledge and data on consum- cannabis can have in the industry in Peru. ers/patients, doctors, and uses of canna- The other key difference that is also an social health system, bis in Peru. This is key for us to develop advantage is that we have considered the resulting in a bigger and effective strategies to open the cannabis possibility of distributing cannabis across market nationwide. the social health system, resulting in a big- controlled market.” ger and controlled market. How is Botaniktech positioning itself to become the leading firm in Peru? What will be the next step for Botaniktech, do- We started our cannabis efforts in March mestically and internationally? 2018, building a company specialized in In 1H2019, we built strategic partner- BIO import/export, commercialization, and ships in Colombia, Canada, Germany, Sebastián Salazar Fuentes is the distribution of cannabis and its derivatives and Ecuador. Our next step is to pass the CEO and founder of Botaniktech. He called Botaniknow SAC. We have done registration process for cannabis-derived develops strategies for Botanitech and Botaniknow, the pioneers in Peru’s things well, and as a result, we are the first products. We expect this to happen in cannabis industry. Fuentes is a specialist in Peru to hold the authorization to op- early 2020. The alliances we have made in the cannabis industry and has erate as a pharmaceutical company ded- internationally give us a solid base to ag- extensive experience in management. He also founded Retina Digital, a icated to cannabis. We also obtained the gressively penetrate markets across the digital marketing agency. He studied first certificate for good storage practices region. These synergies represent huge biotechnology at La Molina National (BPA) in compliance with the regulation production and distribution capacities. Agrarian University, economy at Pacific regarding cannabis and its derivatives. We aim big and intend to be the first University, and medicine at Peruvian University Cayetano Heredia. He has a Today, we aim to be the first company to supplier for the South American market. diploma in ontological coaching from introduce cannabis products to the Peru- At the same time, we will start our own the Cultural Center of the PUCP and a vian market. Later, through our pharma- farming operation and produce canna- diploma in analysis and study of financial statements from the Peruvian Institute ceutical laboratory Botaniktech, we will bis-derived products to be sold regionally of Capital Markets. cultivate and produce the much-needed in 2021. ✖ 28 Medical Cannabis Latin America & Caribbean Special Report Image: Gaia Health Cultivating Business 29 COMMUNIQUÉ GAIA HEALTH

GAIA HEALTH understands that a successful company is compatible with the wellbeing and happiness of the communities that it impacts and with the integrity of the environment and its surroundings. A COMPANY WITH A HUMANISTIC FOCUS

ALMOST WITHOUT EXCEPTION, towns and in Colombia as an answer to many of the municipal government, contributing to an societies of today manifest what they justly aforementioned problems. GAIA HEALTH increase in its annual budget and translat- believe are nonconformities and express was established in the municipality of San ing into public works and programs for its concerns about issues like employment, the Antonio de Palmitos, in the department of inhabitants. environment, inequality, education, and Sucre on Colombia’s northern coast, an area From an environmental standpoint, GAIA health, to name a few. In Latin America, the categorized by the state as ZOMAC (area HEALTH has acquired the infrastructure to situation acquires special importance, as most affected by the armed conflict). The recycle water from a natural reservoir, thus it is one of the regions with the highest in- area, though today at peace, suffered from leaving the community's drinking water dex of inequality in socioeconomic terms violence just over a decade ago, plunging it supply undisturbed. The company also car- and where lack of opportunities manifests into extreme poverty, unemployment, and ries out regular reforestation campaigns in dramatically in less-favored populations. hopelessness. Unfortunately, the govern- the area, ensuring that the crops and derived Therefore, today, more than ever, it is neces- ment's efforts to mitigate these issues have products are produced in an organic way. sary for businesspeople to understand that proven insufficient. Our decision to locate Within the regulatory framework of most being an executive or entrepreneur goes far here involved additional economic, logistic, countries, new and established companies beyond promising business opportunities. and labor costs, as supplies, provisions, and have an obligation to comply with social and It is also a genuine privilege that comes with construction materials had to be transport- environmental responsibility programs. The immense social responsibility. ed a great distance; nevertheless, the deci- vast majority of them do in fact meet these At GAIA HEALTH, we understand a suc- sion was weighed, not in terms of money, requirements, but companies should go be- cessful company is not incompatible with but in terms of happiness and opportunities yond mere compliance with legal require- the wellbeing and happiness of the com- for people, who since have confirmed that it ments. Companies should prioritize the munities that it impacts or with the integrity was the right decision. Today, GAIA HEALTH needs of the regions and its people as much of the environment and its surroundings. represents a source of employment for the as possible, and help guarantee a safe future, Bringing companies where they are needed community, as 95% of our employees are lo- which is not only the responsibility of the most may be the answer to a world increas- cal. Hundreds of local families benefit from state. Companies must be more than just a ingly requiring the integration of the most a decent salary exceeding minimum wage. key to development; they must act as a tool remote communities into a country’s labor While our employees receive free job-train- of union and of reconciliation conveying the market. Knowing how to find the balance ing, additional courses are also given to fos- message to the global village that we are all between coming to these areas and looking ter entrepreneurship, and our youth aware- responsible for each other. GAIA HEALTH for favorable business conditions is a chal- ness programs are intended to help create a is not only a successful company that works lenge that may mean giving up the comforts drug-free future for these families and their every day to reach the highest-quality indi- of a big city and its periphery and sacrificing children. ces, but as palpable proof that, it is present dividends in order to pay a better salary. Additionally, GAIA HEALTH is an im- in the most impoverished regions—and per- The GAIA HEALTH project was founded portant source of taxation revenue for the haps even forgotten towns. ✖ Medical Cannabis Latin America & Caribbean Special Report

AUTHORIZATIONS

GRANTED FOR Global Image: FCM INDIVIDUAL PATIENTS TO IMPORT CANNABIS (BRAZIL) SOURCE: ANVISA

New Renewals authorizations

1Q18 229 506

2Q18 314 557

3Q18 319 620

4Q18 357 604

1Q19 464 862

2Q19 562 1,177

NUMBER OF REGISTERED CULTIVARS (COLOMBIA) SOURCE: ICA DATABASE

Medcann 5 0

Avicanna 3 1

FCM 4 1

Clever Leaves 15 5

Pharmacielo 19 1

Qualcann 0 3

LaSanta 6 4

Khiron 3 0

Psychoactive Non-psychoactive

CANNABIS BUSINESS LICENSES ISSUED IN JAMAICA (2019) SOURCE: CANNABIS LICENSING AUTHORITY

46% Cultivators 30% Retail 13% Processors 9% Research & development 2% Transport Regulatory & Legal 31

02 Regulatory & Legal

THE NEED FOR CLARITY

ince Uruguay became the first country in the verge of major legal breakthroughs. S the world to legalize the industrial, med- Still the only country on earth with the fully ical, and recreational use of cannabis in legalized recreational production and consump- 2013, a flurry of neighboring countries followed tion of marijuana, it’s worth taking a closer look suit and legalized the sale and use of medical at Uruguay’s regulatory framework. As of August cannabis: Chile in 2015, Colombia in 2016, and 2019, only four companies had been licensed to Argentina, Paraguay, and Peru in 2017. Though grow high-THC cannabis—two for medical and Uruguay alone has fully legalized the recreation- two for non-medical purposes. Of the former, ICC al use and industrial cultivation of the plant, so Labs, which was acquired by Canada’s Aurora far its stringent regulatory regime has only grant- Cannabis in 2018, and Simbiosys were awarded ed two companies licenses to grow high-THC the country’s two licenses to grow in greenhouses cannabis for non-medical purposes. Elsewhere built on state-owned land. These in turn supply across the continent, similarly grand ambitions the 17 pharmacies disproportionately scattered have been thwarted. The Colombian market, for across the country who supply Uruguay’s 37,000 example, long investors’ favorite regional son registered “customers,” each of whom has the given its year-round climate, has yet to produce right to purchase up to 10 grams per week of no a single medical cannabis product, in part be- more than 9% THC-grade flower. At USD1.30/ cause its legal framework requires companies to gram to the customer, the pharmacy pays about first pass through a rigorous research and devel- USD1/gram to the suppliers. In addition to these, opment stage before proceeding to commercial another 7,224 home growers and 3,900 members sales. And most confounding, and tantalizing of of 125 cannabis clubs have licenses to grow col- all, are the region’s two largest markets, Brazil lectively. Despite these seemingly myriad oppor-

Image: Xxx and Mexico, both of which are thought to be on tunities, the country still faces a huge shortage. 32 Medical Cannabis Latin America & Caribbean Special Report

“Still the only country on earth with the fully legalized recreational production and consumption of marijuana, it’s worth taking a closer look at Uruguay’s regulatory framework. As of August 2019, only four companies had been licensed to grow high-THC cannabis.”

The roughly 2kg of flower that reaches the coun- only be done under strict regulatory conditions, try’s various pharmacies each week immediately and only three commercial licenses had been sells out, which is why the country accepted ten- handed down by the end of 2019 to Dayacann, a ders from six new commercial manufacturers in joint venture between Fundación Daya, a Chilean February 2019, three of which are estimated to be non-profit whose name means “compassion- accepted by the year’s end. ate love” in Sanskrit, and Australian-based Aus- Colombia, the region’s most promising coun- cann; Alef Biotechnology, a subsidiary of Tilray, try, is even further behind in regulatory terms. a major Canadian pharmaceutical and canna- As of August 2019, for example, there were still bis company; and Agrofuturo, a local producer no medical cannabis products available on the that specializes in low-THC cannabis. Instead, market. Nor, for that matter, had commercial the vast majority of medical consumers acquire quotas for high-THC products been announced, through a widespread network of decriminal- meaning no company has supplied the domestic ized home-growing and non-profit collectives. or export markets with high-THC products. That Meanwhile, in Peru, though medical cannabis said, the first exports of CBD isolate and CBD- was legalized in 2017, the authorities have been high extracts, which don’t require a production incredibly slow in spelling out under what terms quota, had gotten off the ground by the end of people can produce or consume the flower. summer 2019, for which there is great demand in As things stand then, there is neither access to Europe, North America, and Australia. Moreover, cannabis on the domestic market, nor business as of July 30, 258 licenses had been granted by opportunities to be had. What the region lacks, the Ministry of Justice—139 for nonpsychoactive then, is not merely a lack of scale, as in Uruguay, cannabis cultivation, 89 for psychoactive canna- but a far more critical lack of regulatory clarity. bis cultivation, and 30 for seeds. With BMexico on the verge of approving its own As the first country in the region to authorize respective laws, the incentives—and opportunity large-scale, high-THC cannabis cultivation, Chile cost—for (not) working out these kinks have nev- is another continental pioneer. Yet this too can er been higher. ✖ Regulatory & Legal 33 INTERVIEW

PHARMACIELO: COLOMBIA’S GLOBAL CANNABIS LEADER

Colombia’s largest natural cultivation, industry leading science and processing, producing the world’s purest medicinal extracts

That’s what makes us the natural choice

PharmaCielo InsideTM

pharmacielo.com 34 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

CLA aims to leverage traditional and indigenous knowledge of learning & cannabis and form international partnerships to help Jamaica become a key player in the global TEACHING cannabis industry.

Lincoln Allen, CEO, JAMAICA CANNABIS LICENSING AUTHORITY (CLA)

What lessons have you learned while establishing and transhipment port facilities arises an excellent Jamaica aims regulating the medical cannabis industry in Jamaica? opportunity to earn revenue through the global to provide The main lesson is understanding the actual movement of cannabis. needs and resources required to build a new in- shipments and dustry from scratch. These resources include hu- What has been the result of your initiatives, and what are services to the man resources with specialized skills, appropriate the main challenges? movement of technology, a comprehensive regulatory frame- The industry is new, and there is a great deal of cannabis oil, work, and adequate finances. These four areas or learning to be done. The authority places great pillars—technology, human resources, regulatory importance on having a fully compliant indus- inflorescence, framework, and funding—are what any govern- try. The intention is to educate, train, and build and finished ment should have at its disposal in order to build a positive culture and promote compliance. To products a cannabis industry. that end, we have been holding compliance work- shops that are geared at promoting adherence to globally How are you incorporating innovation into the process? the rules and educating the licensees about some One of the hurdles we have to overcome is the of the industry’s best practices. fact that most of our process are primarily pa- per-based or manual processes. We are seeking to How do you see international partnerships impacting the automate processes to increase efficiency, trans- research and economic potential of locally grown medi- parency, and responsiveness. We are working on cal ? an online business portal to automate the ap- Jamaica is in dialogue with Harvard University plication process for licenses. The portal should to forge a partnership in this regard. This should be operational by July 2020. We are also going benefit the country significantly in terms of rec- through a tender process to acquire a technology ognition and reputation. Harvard has for many that will track and trace the entire process, from years been a leader in this type of research, and seed to sale, and increase operational efficiencies, there is a great benefit to be derived from using accountability, and transparency. its existing capabilities and experience to help identify the profiles and medicinal benefits of dif- How can the changes in medical cannabis make the in- ferent strains in the Carribean. Issues of intellec- dustry more competitive on a global stage? tual property rights may arise, but overall it can Based on the current rate at which the authority be of tremendous benefit to the country and an

BIO is issuing licenses, Jamaica cannot consume all excellent opportunity for training, networking, re- Lincoln Allen is the CEO of the local produce. Therefore, the natural pro- search, and knowledge transfer. CLA. Having has served in gression is for us to export. We not only want to the Jamaican public service export raw material, but also be innovative and What are CLA’s goals for the next year? for over 20 years, Allen has contributed to several key export finished products. Jamaica is known for One of our goals is the promulgation of import-ex- policies throughout his career. its high-quality cannabis and is home to a vari- port regulations. Another is to develop a regime Allen has been instrumental in ety of unique strains of cannabis. That gives us a to help integrate small farmers into the regulated increasing the capacity of the CLA from 17 team members to clear advantage. The reported cannabinoid and space. Consideration is being given to the cre- just under 70, including persons terpenoid profiles and various effects that result ation of a mechanism to facilitate their inclusion with specialized skillsets such from using Jamaican cannabis are also advanta- in the industry. We are also aiming to acquire the as agricultural specialists, geous. The other factor is that Jamaica has estab- ISO 9001 certification. This will involve the imple- botanists, and biochemists. He holds a BSc in biochemistry, lished itself as a major transit and trans-shipment mentation of a quality management system that an MSc in national security hub. After the relevant legal provisions are estab- will help improve the authority’s efficiency and and strategic studies from the lished, we will be able to facilitate global canna- service delivery, which is critical, especially in a University of the West Indies (UWI), and an MBA from Nova bis trade. With the promulgation of regulations global market where there is a great deal of com- Southeastern University. to facilitate trade allied with our several transit/ petition. ✖ Regulatory & Legal 35 INTERVIEW a push IN THE RIGHT DIRECTION “In medical cannabis, we The Ministry of Justice and Law have a product that has has worked over the years to been stigmatized for years make sure Colombia has one of the most robust and complete and today represents a legal frameworks for the medical good possibility not only cannabis industry. in terms of jobs, but also development and well-

being for the entire society.” Margarita Cabello Blanco COLOMBIAN MINISTER OF JUSTICE AND LAW

What steps has the ministry taken to speed up the pro- strate the experience we have gathered in the last cess to award new licenses for medical cannabis com- three years through Act 1787 from 2016, which Ministry is panies? allowed us to improve the rules of the game and working on The Ministry of Justice and Law has been work- boost the development of the cannabis industry. ing on several actions to reduce the waiting time decree to required to obtain a license in their different What are your views on medicinal cannabis not just for amend current modalities. These actions range from the correct the national economy, but also to position Colombia as regulation preparation of the physical archive for each re- a global leader? quest to the hiring of new personnel to evaluate The interest of the industry to develop medici- each request. We have hired nearly 15 people, nal cannabis fills us with pride and pushes us to including documentation experts and lawyers. work every day to guarantee equal conditions for Ministry offers We have gone through special working days to companies, supporting entrepreneurs who meet training for support each of the procedures related to the li- the security and quality conditions laid out by the those seeking censing process for some requests from 2018. As government. The government’s 100% backing has a result, we have been able to issue some licenses. boosted the industry and made Colombia a leader license to The biggest challenge we face is the large num- in the medical cannabis space. In medical canna- streamline entire ber of requests. Notably, we give training to peo- bis, we have a product that has been stigmatized process ple who wish to obtain a license in an attempt to for years and today represents a good possibility reduce the error margin with the requests. This not only in terms of jobs, but also development helps us to speed up the revision and awarding and well-being for the entire society. We want process. We have also developed and implement- to support entrepreneurs and generate a healthy ed a mechanism for cannabis control (MICC). It level of competition. We expect this will attract includes certain control mechanisms, as well as more foreign investment. follow-up tools. Medicinal cannabis is a growing industry in Colombia, What strategies have you implemented to guarantee and many sectors, including the government, are going legal security for international companies interested in through a learning process. What can other countries Colombia? learn from Colombia? The government wants to modify the so-called We have learnt that it is necessary to continue im- Decree 613, by which we seek to increase legal proving in legal areas as well as in technical parts security by strengthening legal and technical re- and technological developments in order to keep BIO quirements to obtain licenses. This is done not up with the industry. The medical cannabis in- Margarita Cabello Blanco has been the Minister of Justice only to maintain control around the entire pro- dustry is a fast-changing market; therefore, deci- and Law since 2019. She cess, but also to guarantee the profitability of for- sions have to be made quickly. Equally important, graduated as a lawyer from the eign investment. Additionally, the training pro- we need to maintain a constant dialogue between University Corporation of the Coast. She studied family law vided to our public officials provides them with government entities and the industry to identi- at the Autonomous University tools to ensure they make the right decision and fy the needs and adopt the required regulatory of Bucaramanga and civil thus minimize the number of possible mistakes changes. It is crucial that the government consid- procedural law at Externado during the entire process to obtain a license. At ers new offers and proposals from the industry as University. She began her professional career as a judge present, Colombia has one of the most robust long as they improve the regulatory framework in the judicial branch, where and complete legal frameworks and has been ac- and the overall sector. That’s why we are currently she held various high-level knowledged as such by the global industry. The working on a decree to amend the current regula- positions. She later reached the Supreme Court of Justice new decree, which will be published soon, will in- tion that would serve as a roadmap for the canna- and led the Civil Cassation crease that international prestige. It will demon- bis industry. ✖ Chamber. 36 Medical Cannabis Latin America & Caribbean Special Report COMMUNIQUÉ Legal

Colombia has positioned itself to become a leader in the global medical cannabis industry by legalizing the sector and facilitating the provision of licenses. HIGH EXPECTATIONS

BLESSED WITH WARM YEAR-ROUND CLI- according to GreenWave Advisors, a New obtain in 2018, according to Fedesarollo MATE, low production costs, and a clear York-based investment firm. Labor, which research group, while the average time to regulatory framework, Colombia has the accounts for about half of the cost incurred obtain a license for producing cannabis potential to become a major exporter of by a cannabis plantation, is relatively extracts was 197 days. As this represents medical cannabis products and a hub for cheap in Colombia, where the minimum one of the main bottlenecks faced by the global cannabis research. wage currently stands at less than USD260 industry, all the relevant government en- Farmers across Colombia have been a month. Agronomists, chemical engineers, tities must work together to solve this and growing the plant illegally for decades, de- and chemists are also available to work keep encouraging investors to invest in Co- veloping famous strains like Red Point and with companies for a fraction of what they lombia. Santa Marta Gold. In 2015, the Colombian would charge in Europe and North Ameri- authorities started to bring the industry ca. Add to this the fact that a cannabis plant GROWING INVESTMENT out of the shadows by legalizing medical can yield three or four harvests per year in Despite bureaucratic hurdles, investors marijuana and providing companies with Colombia’s tropical weather as compared from around the world are currently push- licenses to grow, sell, and export medical to one harvest per year in North America. ing ahead with plans to enter Colombia’s cannabis. But entering Colombia’s medical canna- medical cannabis industry. A handful of bis industry requires rigorous planning and these are Canadian companies that have LICENSING BLOOMS high-quality standards. A company that merged with or acquired Colombian com- Since 2017, the Ministry of Justice has wants to export cannabis extract for exam- panies already working in the industry. granted more than 98 licenses for psycho- ple, using its own plants, currently needs to Investors from the US, Europe, and the active and 183 licenses for non-psycho- obtain licenses from at least three different UK are next in the list. Interestingly, an in- active cannabis varieties. Moreover, 138 government entities. Furthermore, com- creasing number of Colombian companies licenses for the manufacturing of derivates panies planning to work with psychoactive are also setting up operations in Mexico, have also been granted. There are more forms of cannabis must also apply for a Peru, Europe, and the US. Based on these licenses under review by the relevant au- quota that states the quantity that can be trends, analysts believe medical cannabis thorities, but the majority of them are for grown or used each year as raw material could become one of Colombia’s main ag- small or medium farmers. for extracts. The International Narcotics ricultural exports within 10 years. This frenetic interest in medical canna- Control Board, acting on a special request Despite the large number of licenses bis has been propelled by low production from the Colombia government, increased granted, currently only eight companies costs and the large profit margins that the amount of cannabis Colombia will be have registered their varieties of cannabis could be made by companies that manage able to legally grow and export in 2019 from in Colombia. Still, medical cannabis ex- to successfully export cannabis and its ex- 1.2 tons to 14, in a sign of confidence in the ports in 2018 were valued at USD144 mil- tracts. country’s capacity to handle and regulate lion, surpassing Colombia’s cacao exports, Producing a gram of cannabis in Co- higher production. according to Fedesarollo. lombia costs approximately USD0.05 Licenses to grow psychoactive varieties Fedesarollo estimates that by 2030, Co- compared to USD1.5 in North America, of cannabis took on average 248 days to lombia’s earnings from cannabis prod- Regulatory & Legal 37

ucts could reach USD2.7 billion. Equally vision by Colombia’s congress will also through which the government can help important, the industry could create an enable companies that produce cannabis boost the industry. estimated 41,000 jobs and use 1,550ha of extracts to set up operations in free trade One of the biggest challenges facing the land. Notably, most of Colombia’s canna- zones where they can enjoy tax exemp- cannabis industry is the lack of available bis plantations have been set up near large tions. This will likely differentiate Colom- financing options. So far, only one bank in and medium cities for security and logistics bia from other medical cannabis markets Colombia is offering loans to companies reasons as farms located close to cities also and could further boost services that re- involved in the sector, while others have have easier access to markets, processing volve around the industry, while support- been reluctant over fears that their assets facilities, and qualified personnel. ing investment in technology, knowledge in the US will be targeted by US regulators. transfer, and the creation of new facilities However, it is only a matter of time be- HIGH EXPECTATIONS to meet international standards set by fore the situation of the ground changes Colombia needs to find ways to move be- EMA, FDA, and others. for the better. In September 2019, the US yond producing raw materials if it wants As more licenses are granted, the Co- House of Representatives passed the SAFE to fully exploit the plant’s potential. As the lombian government and investors must Banking Act, a bill that allows banks in that medical cannabis industry develops, one also look for ways to turn this into a larger country to serve cannabis-related business of the country’s main challenges will be to industry in which medical cannabis can in states where the commercialization of become an exporter of value-added prod- be integrated into areas like medicine, in- the plant is legal. The bill, which will now ucts. dustry, textiles, and food. To that end, Co- be discussed in the senate, aims to pre- So far, the country has not produced lombia must continue investing in R&D so vent federal regulators from taking actions any cannabis-based medicines, though the that it can leverage its unique capabilities against banks that provide services to the current legal framework makes it possible and produce finished projects and, more cannabis industry. for pharmaceutical companies to conduct importantly, stay ahead of other countries As the international framework for can- cannabis research in Colombia. Current looking to enter the global medical canna- nabis becomes more favorable, the global legislation also enables entities in Colom- bis market. cannabis industry is expected to grow from bia to apply for cannabis research activi- Colombia must also find ways to sup- USD12 billion in 2018 to USD166 billion by ties. This can help companies and academ- port the work of researchers and members 2025. By legalizing medical cannabis and ic institutions work on valuable projects, of the medical community who are experts facilitating the provision of licenses, Co- like developing new varieties of the plant. in cannabis. Funding cannabis research lombia has positioned itself to capture a A draft law that is currently under re- projects at local universities is another way significant share of the market. ✖

The content of this article is intended to Raúl Buriticá provide a general guide to the subject matter. Buriticá Abogados SAS Specialist advice should be sought about Calle 69 No. 4-48 Of. 401 Bogotá D.C Colombia your specific circumstances. Tels ( 571) 4674525 / 4674742 | www.buriticaabogados.com 38 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

“Colombia has to move scientific ahead in issuing excellent manufacturing practices RIGOR to establish a market for master products.”

Invima promotes and protects Julio César Aldana Bula public health through the GENERAL DIRECTOR, THE NATIONAL INSTITUTE OF surveillance of products that people FOOD AND DRUG SURVEILLANCE use and consume on a daily basis. (INVIMA)

How does Invima seek to use digitalization? How is Invima facilitating the success of the medical Digital transformation is a tool to fight corruption cannabis sector, and what are your short- and medi- Focusing and to be more transparent and efficient. It affects um-term expectations about its role in the face of a rap- on digital our six regional offices. As a result of digital trans- idly developing market? formation and a restructuring of all these regional I only see Invima in its role as health authority. transformation offices, we aim to make sure entrepreneurs can Moreover, we have a standard that has advanced to elevate access the sanitary registry remotely. We plan to and cannot be stagnant. Colombia has to move efficiency as form alliances with the academy and other state ahead in issuing excellent manufacturing prac- a medical institutions such as chambers of commerce. We tices to establish a market for master products. In organize workshops in every region where we addition, we have to keep moving forward so that authority in train and educate people about the effects of com- there is more transformation, more physiothera- Colombia plying with sanitary standards on public health. peutic products, as well as more products based on chemical synthesis. There are many instances How does Invima plan to continue increasing scientific of the government seeing how to promote this rigor and vigilance, particularly in the field of medical without neglecting public health interests. Giving relevance and cosmetic cannabis? to public health Invima does not promote entrepreneurship, eco- How does Colombia stand in comparison to the region? nomic development, or anything similar. Invima Invima focuses on health issues, quality, safety, is a health authority. Many times, they can be rec- efficiency, and good manufacturing practices, so onciled when the interests are legitimate, and we that products can access international markets. Performing agree on the purpose of promoting public health. Notably, a large part of the establishments I vis- regional We have a clear and defined policy regarding the ited in Canada are from investors present in Co- expansion use of medical cannabis. We respect the autono- lombia, so there is transparency of knowledge and strategies my of nations that have accepted the use of recre- technology that gives us peace of mind as a health ational cannabis, though in Colombia, the use of authority. The rigor in Canada around production cannabis is restricted to medicinal use. That does is extremely high. not prevent us from moving forward, for example, BIO in something that the industry demands. In fact, As one of the most important authorities in Colombia, Julio César Aldana Bula is the we have already done it in the cosmetics sector, what is your outlook for 2020? General Director of Invima. where there are more than 300 health records. Essentially, we seek to build prestige. To have He has more than 28 years of experience in the public Compared to other countries, such as Canada, Co- prestige, society must recognize it. We are pro- and private sectors. He was lombia has made great efforts. There are certain mote and protect public health through the reg- previously director of Invima business developments that we cannot ignore as ulation of products that people use and consume between 2002 and 2007, Consul General of Colombia long as we have a single roadmap that is based on on a daily basis. This recognition is the most im- in Washington, and general scientific rigor. With science, we can define spe- portant and is achieved through transparency, manager of the Changing Lives cific uses and a timely development of cannabis efficiency, and hygienic conditions. We have ad- Foundation in Barranquilla. He around the needs in the world of medicine, for ex- vanced significantly in the area of food, cosmetics, has a degree in medicine with a specialization in diagnostic ample, pain and inflammation, insomnia, anxiety, and medical devices. We have facilitated proce- imaging from the University of muscle spasticity in some specific diseases, issues dures and eliminated some. The pharmaceutical Buenos Aires and a master’s of refractory epilepsy in specific syndromes, and issue has cost us greatly. It has been more difficult degree in management and management of social security so on. Colombia must hold on to scientific rigor to to move forward. It will take us more time but we systems from Universidad further boost the medical cannabis industry. will do it. ✖ Alcalá de Henares in Spain. Regulatory & Legal 39 INTERVIEW

POSITIVE developments Above all else, Khiron is helping the Colombian government build a mechanism under which the medical cannabis industry can properly participate in the country’s economic development.

Juan Diego Álvarez VP OF REGULATORY AFFAIRS, KHIRON LIFE SCIENCES CORP.

What were the legal requirements for Khiron to become able investment worldwide. It is a capital-intensive The only the first company to receive government authorization to industry, which means that only key players will be company with commercialize psychoactive cannabis? able to operate in it. Khiron’s business proposal has Such authorization is internationally known as quota been extremely attractive for investors in the sense authorization authorization. The licenses resemble a general au- that we are the only Latin American company fo- to cultivate and thorization that provides the regulatory space for a cused on the final product and the development of manufacture company to define and apply for a specific kind of a medical product, rather than a low-cost cultivator medical production each year. What we obtained with the or raw materials. We have a business proposal with quota was the first unique authorization given by aggregated value and investors have been intelligent cannabis the Colombian government to a company to culti- in identifying its potential. We closed the year with extract for the vate and manufacture cannabis extract for medical strong capital in the bank. We are the only company Colombian purposes to attend the domestic market. This was in the sector to generate revenue with its strategy. a huge achievement for us, and we are the first and market only company with such authorization. Such autho- How can Colombia’s new policies further promote the rization has many technical requirements that need sector’s development? to be met. For example, to apply for the quotas, you We received a proposal from the government that is need to show the government that you have the data part of its plan to consolidate the industry. We take for the patients to be serviced. This is important be- this news positively. One of the government’s key cause cannabis is a controlled substance, and you concerns is controlling the number of licensed com- cannot cultivate or manufacture an extract for which panies. We have around 2,000 license holders but there is no final destination. You need to identify the the market is not big enough to sustain them all. The number of patients, the pathologies, the type of di- national policy in Colombia is to promote specific in- agnosis, and the doctors who prescribe that product, dustries the government considers key to economic and then you can produce that product. Before we development. The issue, then, is to define or struc- could even apply for these quotas, we needed stabil- ture a mechanism under which the industry can par- ity tests for our extracts and the formulation of prod- ticipate in national development. In the first months BIO Juan Diego Álvarez has 10 ucts. This is the final regulatory requirement. We of 2020, we should start that technical conversation years of legal experience in needed some 20 permits before we could undertake with the government. Colombia and is an authority on the operation. It is a huge achievement because we Colombian medicinal cannabis regulation. He was previously were able to prove to the government that there is a What progress has been made in regard to the govern- a public policy advisor to the medical need for the products we will develop. The ment regulating access to CBD products? Ministry of Health in Colombia. authorization for 2019 is for 500kg of dried cannabis. There were some regulatory developments in 2018, In the last five years, he has been a consultant for Payson According to our calculations, this will allow us to but there is a need to do more. We have been con- Center for International reach around 15,000 patients and produce around solidating basic issues and have regulated the market Development and USAID, 65,000 products. We have already applied for our for cosmetic CBD products. This has been perceived a professor of law at the quota for 2020 and will be the only company capable by foreign markets and investors as a positive devel- University of Los Andes, and VP Regulatory of Khiron Life of selling products in 1Q 2020. opment. It allowed us to acquire permits to sell our Sciences Corp. Álvarez holds products in the US. We also have authorization to an LL.B from the University of What is the nature of the medical cannabis industry? sell one of our lines in the UK. We are still waiting on Los Andes, a JD from Tulane University, and an LL.M from The cannabis industry has grown significantly over regulations for other types of products such as nutri- Columbia University. the past three years, and there has been consider- tional supplements and food and edibles. ✖ 40 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

by the BOOK By demonstrating traceability and transparency in every step of the process, FCM is able to guarantee its clients and the world that the industry is clearly regulated and safe.

Diego Ruíz REGULATORY AFFAIRS OFFICER, FCM GLOBAL

How would you summarize your experience working everything in every step and working along with with the government? government entities has helped us ensure that the Transforming During the Santos government, we were part of industry is clearly regulated and safe in the eyes the sector the transformation of the medical cannabis in- of the world. The Colombian government aims to dustry in Colombia, which became one of the best have transparent industries in the development through good in the world. The idea is to improve the quality of of medical cannabis that abide by laws, both psy- communication life of everyone by increasing employment rates, choactive and non-psychoactive, and it is focused with the education, and the medical advancements, which on this. These protocols help us to add value to government is the message that the government has conveyed. the existing governmental regulations, making As such, FCM Global has been a key participant in FCM continue to pioneer in the medical cannabis the last Analdex forum, where Dr. Javier Díaz, the industry, particularly in Colombia. president of Analdex, invited President Duque, Complies with who gave his support to the industry as a potential What is the importance of traceability for your business necessary rules market to boost the economy. operation? Traceability is extremely important because a cus- to lead How easy has it been to become one of the three com- tomer must be able to access to our page and get panies in the cannabis industry to have a bank account the proper information about the final product in Colombia? that was harvested at the Antioquia facility, in- Banks have a more robust compliance than the cluding the temperature, humidity, location, and public sector and, for us, it has been extremely date when the cultivation, harvesting, dispatch- rigorous. Their protocols have many demands ing, and so on happened. In addition, by qualify- such as conducting background checks person- ing our suppliers, we guarantee that we comply ally and inspections of our facilities in Antioquia, with quality standards and have the traceability Bogotá, and Tolima in order to validate the trans- from the organic inputs to our final product until parency of the company’s operations. it is delivered to our final client. That is what the world is asking for, and that is where we are head- What have been the benefits of implementing good cor- ing. porate practices such as the global certificate of agricul- ture, or ISO 9000, 14000, 17015, 22000, GMP, GAP, GLP, What would you advise an entrepreneur in Latin America BIO Diego Ruíz has 25 years HACCP, and EU-GMP? who wants to start venturing into the medical cannabis of experience in a private FCM has shown traceability and transparency in industry? banking institution with an A learning curve is essential to growth. It is all emphasis on the public and about reading the law, understanding it, and inter- private sectors for Colombia “FCM seeks to control and Latin America. He is preting it clearly in order to have valid arguments a member of the board of the entire production with a regulator, customer, supplier, or any stake- directors of five companies holder. Thus, they need a clear path to accomplish and the co-founder of three chain—sowing, production, companies in the industrial the vision and direction the company wants to sector with 50 employees. transformation, research, head: agribusiness, final product development, or He holds a bachelor’s of medical. FCM seeks to control the entire produc- engineering, architecture, and and export—to ensure full business. He also has 25 years tion chain—sowing, production, transformation, of organizational management traceability.” research, and export—to ensure full traceability. ✖ in LATAM. Regulatory & Legal 41 INTERVIEW

FCM seeks to control the entire QUALITY production chain—sowing, production, transformation, research, and export— above to ensure full traceability. all else

Felipe Velásquez CEO, FCM GLOBAL

New companies are entering the medical cannabis What efforts have you made to achieve this quality and Complies with business all the time. How does FCM differ from other consistency, and what are your processes to strengthen international companies? the agricultural part? We are highly focused on providing high-quality When it comes to plant growth, there is an entire standards extracts for pharmaceutical, cosmetic, and nutri- standardized process to ensure they are healthy. tional companies while maintaining an excellent Within the cultivation process, it is important to relationship with our customers and off-takers highlight the GLOBAL GAP, which allows us to trace Making sure to by having a solid understanding of their needs and control the production chain at all times. We es- in terms of what product to deliver and launch tablish control parameters such as good collection improve value in the desired market. We have the central ingre- practices, the correct use of personal protection ele- chain dients—CBD, THC, CBN, or CBG—for any final ments, and information records of the plants 24/7 in products for consumers. order to guarantee safety and avoid cross contami- nation throughout the whole process. On top of this, How does FGM Global seek to differentiate itself to im- we make sure to implement processes of evaluation Guarantees prove its position in the market? and verification of the behavior of our varieties; this safety in whole In the supply of cannabis extracts, we define is how it all starts from the rigorous selection of those process quality as the consistency of the supply of a prod- varieties with characteristics of commercial and ag- uct with the specifications expected by the client, ricultural importance, adaptability to the tropics free of heavy metals, pesticides, or any compo- and yield. Prior to the establishment of the crop, it nent other than expected, satisfying the client’s is necessary to verify all those elements that are in expectations. All these parameters should be contact with the plant and that can intervene with based as much as possible on complying with the its development, such as high levels of heavy metals methodologies given in European or Canadian and pesticides, harmful microorganisms, or foreign pharmacopoeias, among others. Hence, one of elements. Subsequently, during the establishment the promises of this industry is that cannabis ex- and growth of the crop, the environmental, micro- tracts are as natural as possible. It is important biological, and nutritional conditions to which the to know that quality management is the set of plants are exposed are monitored with the aim of planned and systematic actions to provide con- detecting changes that may affect the cannabinoid fidence considering all those aspects have an im- content of the plants or their health. pact on the product’s quality and service. Hence, BIO we focus on implementing a quality culture with How does FCM Global achieve quality of the final product? Felipe Velásquez was with Abbott Laboratories for 10 all members of the company and close friends, One of the main items within the quality manage- years, holding several positions achieving a generalized commitment to quality ment system is to establish a program for cleaning in finance and commercial practices, and process improvement at all hierar- and disinfecting areas, equipment, and utensils, operations in four continents. He holds an MBA from DePaul chical levels. since the quality of the product depends on the hy- University and an engineering giene present in any implement, personnel, or relat- degree from EAFIT University. What have been your efforts to achieve that quality and ed area in the flow process. Cleaning is the absence He has over 20 years of consistency in your products? experience in business related of dirt, and its purpose is to reduce or kill microor- to healthcare and the proven This quality is achieved through a rigorous and ganisms that can contaminate products and cause ability to execute in four standardized quality process at every step from deterioration. Disinfecting, meanwhile, can be de- continents. Velásquez has seed, propagation and cultivation, cutting, dry- fined as partly eliminating the number of bacteria held senior management roles in operations, finance, ing, extraction, refinement, and packaging. found in an environment or surface, so that it is not acquisitions, and sales, and These standardized processes are internationally harmful to people and products. The main objective has successfully led the recognized under ISO standards, Good Agricul- is to establish guidelines that avoid cross-contam- global expansion strategies for two leading healthcare tural Practices (GAP), Good Laboratory Practices ination and ensure the safety of the product, envi- organizations. (GLP), and Good Manufacturing Practices (GMP). ronment, facilities, and personnel. ✖ Image: XX 42 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

SOUND advice

Helping identify, protect, and develop all the intellectual property rights of companies in the cannabis sector is a key focus of Buriticá Abogados. “We help companies to exploit their full potential thanks to the pillars of our advice and the technical and legal team that we Raúl Buriticá PARTNER, put at people’s disposal.” BURITICÁ ABOGADOS

Why should there be a constructive dialogue between fields, and, still, there are many benefits to be dis- Identifies, government, institutions, and the private sector for the covered from the cannabis plant, for example, in protects, and development of medical cannabis industries? cosmetics, nutritional products, supplements, New medications, procedures, and business mod- textiles, medicines, and so on. To integrate our develops all els will impact the social welfare of Colombia, pillars—intellectual property management, con- intellectual making it possible to access new methods and for- sumer rights, and life science affairs—we work property rights mulas with a more professional and standardized with the inventor, developer, or company, and to- process. This dialogue is essential because the gether, we set up the protection and add a value government has to listen to the needs of the sec- generation. In the beginning, we help companies

tor to understand how to make it easier for entre- to get their licenses and permits needed to oper- Focuses on preneurs, farmers, and investors to develop their ate in Colombia. Then, we advise the companies brands and business. If both parties, private and public, do to register their products like cosmetics and med- not work together, Colombia will lose this golden icines in parallel; we register their patents, copy- patents opportunity to position itself worldwide as an im- rights, or trademarks and to close joint venture portant business hub. Moreover, both the private agreements, due diligence process, or commercial sector and the government should build that path agreements. We help companies to exploit their Industry player hand in hand to develop the industry with clear full potential thanks to the pillars of our advice principles. and the technical and legal team that we put at for over 14 years people’s disposal. How would you describe the consultant role of compa- nies in the medical cannabis market? How could the region be integrated by a more harmo- The medical cannabis market is complex. It is a nized sector in legal and commercial terms? multidisciplinary process, with the intervention Ecuador has just legalized the cultivation of can- BIO of different public entities and usually with a long nabis, Mexico is close to doing so, and Peru al- Raúl Buriticá is a lawyer time for procedures and answers. In general, one ready has. To take advantage of this moment, I from Javeriana University. of the roles of a consultant should be to have all recommend two things. The first would be to make He is also a specialist on industrial property copyright the processes clear, file the right documentation, a great association between the Latin American and new technologies from to be updated on all legislation related to canna- countries of cannabis industries. That will help us Externado University. He has bis, and have an excellent communication chan- create an organization with common strategies to a pharmaceutical marketing diploma from Sergio Arboleda nel with the client and the entities. Furthermore, protect investors, patients, and to have the same University and an LLM in consultant companies are looking to protect the vision in the region. It also serves as a mechanism international trade law from process of innovation of new products in the med- for negotiation and the protection of the industry. the University Institute of European Studies in Torino. He ical cannabis field. At Buriticá, we help identify, It is a priority, as it is with the pharmaceutical in- has been advising companies protect, and develop all the intellectual proper- dustry, to have a large Latin American organiza- in the health sector, especially ty rights that a company might have. One of our tion. As the people of Asocolcanna in Colombia national and international pharmaceutical laboratories roles in Buriticá Abogados is to help companies have done, we must create a regional Asocolca- and cannabis companies, identify, protect, and make real breakthroughs to nna. The second recommendation is to try to har- among others. He currently develop ideas into tangible, sustainable, and prof- monize the legislation in the points where it can serves as an advisor to one of itable projects or products. be done. For example, for cosmetics, we have the the world’s leading companies in biological medicines, as Andean Decision to regulate the production, stor- well as in mass consumption How can you fill the gaps left by other companies in the age, import, and commercialization of cosmetics. companies. He is a member industry, and how can you become the reference for the For trademarks, patents, and so on, there is the of INTA and sits on the board of directors of the Colombo- industry? 486 Andean Decision on establishing a common Israeli Chamber of Commerce. The cannabis industry has an impact on many intellectual property regime. ✖ Regulatory & Legal 43 INTERVIEW

Prætorium is working to assist local companies on the commercial aspects of the cannabis business to create further economic opportunities for the industry. voice of Xavier Valverde Carcache PARTNER, REASON PRÆTORIUM

What’s your opinion on the recent reform on medical can- tional demand and identify the market trends that Foreign investment nabis passed by the Ecuadorian legislative assembly? create economic opportunities for the country’s could rise to The reform has significant meaning as it is part of future cannabis industry. Therefore, we have an the general reform of the criminal code and drug obligation to inform all interested groups how to USD prevention law that classified cannabis as a con- invest and what to produce based on international 200 trolled substance. Now, it makes a difference for demand. In this way, we can create jobs and eco- million by 2025 hemp, taking it out of the catalogued substances nomic growth out of the industry, hopefully while list, which is used in the production of industrial building up our brand the same way we did with hemp, and general cannabis. Nonetheless, with our bananas and cocoa, which are globally recog- Average company this differentiation, industrial hemp would still be nized as the best in the world. will generate at least regulated by the Ministry of Agriculture. Cannabis with THC, or the psychoactive element, would be How would you define the services an interested compa- regulated by the Ministry of the Interior. In the ny can expect from Prætorium? 60 jobs and impact future, all health-oriented developments and re- We will support a company with all the due dili- Ecuador’s economy search would fall under the umbrella of the Minis- gence regarding regulations on opening and oper- try of Health, thus allowing experts on each area to ating a cannabis-related business in Ecuador. This regulate accordingly. includes nationalizing or registering a foreign firm in the country, acquiring properties and land for What would be Prætorium’s strategic role in the advance- the business, every region’s regulations, and lim- ment of the industry and linking up all stakeholders for itations on acquiring cannabis seeds, creating the the development of medical cannabis? company, registering the company with the trea- We are already consulting the major private stake- sury into the tax system, and even with the migra- holders of the industry in Ecuador, which has led tory process for foreign executives looking to come to us playing an important role in the talks with the to the country to operate their businesses. government on the subject. Through this collab- oration, we have been able to communicate with Looking at your expertise in the sector, how would you key European, Canadian and American players in define your strategy to attract the ideal partners consid- the industry, which have pledged to invest over ering how different conditions are in Guayaquil and Quito? USD200 million through 2025 in our local cannabis We have prepared a package of incentives nation- industry. We have asked these groups to invest first wide to promote investing in the sector. From tax in the geological and ecological research studies to cuts to other fiscal benefits, there is a wide-rang- identify where in Ecuador, according to our condi- ing set of conditions and regulations that prop- BIO tions, we should grow our hemp and which strains erly managed make investing in cannabis a great Xavier Valverde Carcache is a in particular are best suited for us. We want to learn business opportunity regardless of where you are lawyer from Ecuador pursuing from the mistakes of other countries and alongside based in Ecuador. We also have legal security and a master’s degree in state law with an emphasis on the foreign sector leaders identify and establish our fiscal stability to boast and solve the main concern natural resources at Externado own high-quality brand of hemp as a country. We for a foreign investment group when looking to University of Colombia. have also gathered a long list of local companies open businesses overseas. ✖ Currently, he is also being considered as a candidate looking to partner with foreign firms and explore for a PhD at the Catholic business opportunities in the sector. University of Argentina. He “We are already consulting had a successful incursion in public service as an advisor What do you expect to be Prætorium’s contribution to the the major private to the environment minister development of the private sector? and was also an under- We expect to support all players and potential stakeholders of the industry secretary of marine and coastal ones through guidance in navigating the legal management in the same in Ecuador, which has led government. In early 2019, framework of this rising and complex industry. he became part of Hoban Our goal is to be certified nationally and interna- to us playing an important Law Group, one of the most tionally, through partners, as a firm able to assist prestigious firms specializing in role in the talks with the advisory regarding the cannabis local companies also on the commercial aspects of industry and was appointed its the business helping the country secure interna- government on the subject.” representative in Ecuador. 44 Medical Cannabis Latin America & Caribbean Special Report LEGAL COMMUNIQUÉ Legal status of hemp in Ecuador

BACK TO LEGALIZATION

After years of TO UNDERSTAND THE EVOLUTION OF THE ECUA- substances for their trade. campaigning DORIAN LAW AROUND HEMP, it is necessary to This meant that private companies keen to mention the first great change of paradigm that launch and develop the hemp industry that had from groups and has happened regarding the penalization of its already started to flourish around the world be- professionals consumption. Cannabis in general is considered came frustrated. The authorities’ position was interested in the a controlled substance according to the Unique that they could not authorize its sowing because Convention of 1961. Article 354 of the 2008 Con- it was considered illegal according to the law. burgeoning cannabis stitution mandates the state to develop coordi- After years of constant battling from groups industry, Ecuador has nated programs of information, prevention, and of people in favor of cannabis and profession- taken a significant control regarding alcohol, tobacco and narcotic, als interested in this new industry, the National first step, becoming and psychotropic substances. It also offers treat- Assembly of Ecuador listened to the arguments ment and rehabilitation to occasional, frequent, of people who see hemp as an alternative for the one of the countries and problematic consumers. To conclude, it Ecuadorian agricultural sector. On September in South America states that “in any case it could be allowed to pe- 17, 2019, with 85 votes in favor, some reforms in to have legalized nalize it or violate its constitutional rights.” the Criminal Code were approved. These reforms As years passed by, being aware that the world were directly related to targeted substances. cannabis crops, was experiencing great changes concerning the On one side, this reform decriminalizes the specifically hemp. medicinal and industrial use of cannabis, Ecua- sowing, cultivation, and harvest of cannabis as dor followed the example in October 26, 2015, long as it has the authorization of the competent when the Organic Law of Integral Prevention of authority. The handling of this product must the Socioeconomic Phenomena of Drugs and the have therapeutic or investigative aims, and it Regulation and Control of the Use of Targeted must have an industrial and not pharmaceuti- Substances was issued. This law, far from being cal use. It must be used for scientific purposes prohibiting, establishes the way in which the not medical investigation or training, as stated state must regulate the activities related to the in the Organic Law of Integral Prevention of the management of this type of substances. Socioeconomic Phenomena of Drugs and the In this law, hemp is classified in general as a Regulation and Control of the Use of Targeted substance that needs control, which makes it Substances. subject to the corresponding authorization for On the other side, the reform of the Crimi- its handling; however, an antinomy appeared nal Law embraces this worldwide tendency and between the before-mentioned law and the acknowledges hemp as a different crop from Criminal Law of Ecuador, which was issued in the rest of cannabis. Understanding the need February 2014. to differentiate it from marijuana and asserting This contrast consists of the fact that Ecua- that hemp is separated from that categorization dor had, on the one hand, a law that grants one as long as it has 1% THC from the other species the possibility of obtaining authorizations for of cannabis. It also orders the elimination from the handling of targeted substances and, on the the list of targeted substances that must be con- other, another law that penalizes—with impris- trolled. onment of one to three years—the sowing, culti- This implies a great first step to include Ecua- vation, or harvesting of plants that produce these dor on the list of countries from South America Regulatory & Legal 45

that have followed this global trend into the le- in marijuana. For this, the ministry is granted a galization of the crops of cannabis, specifically term of a 120 days for the issuance of the corre- hemp. sponding law. It is necessary that work on this Complying with all the necessary steps for law starts as soon as possible. It is mandatory to the creation of a law in Ecuador, the national have the participation of the interested parties of assembly remitted the project to the president, the Ecuadorian industry who want to invest in who made a partial veto of it without objecting this new agroindustry. Even though the advisory or modifying any articles related to targeted sub- of experienced people in the market is needed, it stances. However, the process has been delayed is also noted that Ecuador, as any other country due to the forwarding of this project to the Con- from the globe, has its particularities that must stitutional Court for its analysis. There are four be acknowledged in this law. We must be clear: constitutional observations that must be done by This law needs to contemplate the different the president. It is important to emphasize that characteristics and needs of Ecuador and meet none of the observations are related to the topic the concerns of investors and farmers, allowing of our concern. them guarantees and security. With the reply of the Constitutional Court at Ecuador has made great advances in creating the end of November of 2019, the National As- the required conditions for the correct develop- sembly must decide and make a statement over ment of the cannabis’ industry in the country. the observations of the partial veto from the We consider the promotion of this productive president and about their position. sector indispensable due to the wealth and hope In the case in which this reform related to tar- it will provide to Ecuadorians. geted substances is made and approved by the It must be understood that the birth of this national assembly without any possible changes, agroindustry in our country will create not only our attention must be placed on the Ministry of alternatives to production methods that are used Agriculture and Livestock. This is highlighted nowadays about the uncountable uses of hemp, since one of the regulations of the reform to the but it also will attract foreign investment that will Criminal Law states that this institution is the increase currency circulation and tax profit. Ad- competent authority to issue regulations regard- ditionally, it will produce hundreds of direct and ing the sowing, cultivation, and harvest of hemp. likely thousands of indirect jobs. As we know, This makes a lot of sense if we consider that this this industry has improved the economy of many plant is introduced as any other crop because of countries, which is precisely what Ecuador needs the absence of the psychoactive substance found at the moment. ✖

The content of this article is intended to Xavier Valverde Carcache provide a general guide to the subject matter. PRÆTORIUM | Estudio de abogados Specialist advice should be sought about Junín No.105 y Malecón. Of. 703. Edif. Vista al Río Guayaquil-Ecuador EC090313 your specific circumstances. T: +59346016905 / +59346015093 | www.praetorium.com.ec 46 Medical Cannabis Latin America & Caribbean Special Report Image: Plena Global Holdings Inc. Regulatory & Legal 47 INTERVIEW

Can you explain the origin of your relationship with How did you end up being the CEO of five companies? Hemp Solutions? Our first association is Club Cannabico Xochip- Tomas Rycek, the general manager of Hemp illi, where we defend the human rights of the Solutions Europe and president of the cannabis consumer, generating protective mea- Czech-Mexico Chamber of Commerce, was sures for users, helping them grow and consume looking for business partners in Mexico to cannabis legally. In 2016, Fundación Ananda develop projects in the cannabis sector. We was born, a civil association that creates links liked what it was doing and vice versa. Club between patients and doctors who use canna- Cannabico Xochipilli had been operating for binoid treatments to provide a better quality of two years when Rycek approached us. We seek life for those suffering from diseases. A few years to have the authorization of the Federal Com- later, we started to work with Hemp Solutions mission for Protection against Sanitary Risks Europe, and together we decide to create Hemp (COFEPRlS) to finally became a cannabis club Solutions Latinoamerica to bring the knowledge Jasiel Espinosa for growers and leave the violent market asso- and experience of Rycek and the Czech Republic PRESIDENT, ciated with the plant in Mexico. We have been to Mexico. We also have CiBiDiUM, a medicinal FUNDACIÓN ANANDA & working with Fundación Ananda for around oil made in Europe that we want to produce in PRESIDENT, four years to translate scientific studies from Mexico. We are currently the only distributors HEMP SOLUTION important universities around the world. We of these oils in the country. We offer legal advice LATINOAMERICA also do the medical monitoring of patients through the law firm Despacho Atención Inte- with specific diseases who consume canna- gral Coorporativo, the first law firm to specialize binoids and obtain good results that improve on matters of . We also have BIO their quality of life. With Hemp Solution Eu- a media channel called Radio Pacheco with a Jasiel Espinosa is a partner at the law rope's 20 years of experience in growing hemp reach of 400,000 interactions a month. This is firm Atención Integral Corporativo and is the founder of Club Cannabico Xochipilli. and producing medicinal oils from cannabi- how we consolidate a media market just for the He is also director of Radio Pacheco. noids, we could replicate its models in Mexico. cannabis community. ✖

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PREDICTED SPENDING ON MEDICAL APPLICATIONS OF CANNABIS BY 2027 (USD MLN) SOURCE: CANNABIS INTELLIGENCE BRIEFING

BRAZIL 362.8

ARGENTINA 122.7

PERU 48.2

COLOMBIA 17.6

CHILE 6.5

MEDICAL CANNABIS AUTHORIZATIONS BY SPECIALTY 2019 (BRAZIL) SOURCE: ANVISA

66% Neurology and pediatric neurology 10% Psychiatry 6% Radiology 4% Neurosurgery 2% Orthopedics

12% Other Leaves Image: Clever Pharmaceutical & Medical 49

03 Pharmaceutical & Medical

FEEL-GOOD FACTORS

atin America is possibly the world’s most process. The second barrier to making the right L promising region for the development of medical advances is securing the requisite fi- the medical cannabis sector for more rea- nancing. If the US, for example, can reach a legal sons than one. On the one hand, there are leaders modus operandi at the federal level, Galán told such as Colombia, which have temperate equato- TBY, this would go very far in giving the region the rial climates that allow for year-round cultivation. banking and financing the industry needs to de- On the other, the region has a number of bur- velop. What is more, he reiterated, a move by the geoning regulatory environments keen to capital- US federal government would also give regional ize on the plant’s value-adding potential to escape governments a much-needed impetus to expedite Latin America’s perennial export-commodity their own regulatory reforms, bridging both polit- trap. As former Colombian senator Juan Manuel ical and cultural canyons in the process. Galán, who helped legalize the plant in his coun- Colombian firms such as Plena Global Holdings try in 2016, told TBY, if Latin American countries Inc understand this already, which is why they are can leverage their large, highly educated young working hard to develop the region’s best isolates, populations to conduct more industry-related re- distillates, and full-spectrum oils for the medical search, the region will have a distinct advantage market, and not merely for economic impera- over Europe and North America in conducting the tives. As Andrés Fajardo, President of Colombia’s ground-breaking studies and R&D needed to lead Clever Leaves, whose team of organic chemists is the global medical cannabis industry. cooking up pharmaceutical prototypes in a lab That, essentially, is the first barrier to improve just outside of Bogotá, said: “We not only have medical breakthroughs being done in the re- the right; we have the responsibility to leverage gion—establishing the right regulatory framework something that’s been painful for the country and for companies to make long-term investments turn it into something positive,” especially when it in better growth and extraction methods and for comes to making medical advances against pain,

Image: Xxx universities to conduct affordable studies in the epilepsy, and anxiety. 50 Medical Cannabis Latin America & Caribbean Special Report

“In October 2018, the Canadian producer Aphria donated cannabis oils for a study undertaken by Buenos Aires- based pediatric hospital Garrahan to assess the effect of cannabis on children with refractory epilepsy, the first such experiment of its kind in Latin America.”

Colombia, and local firms, are far from alone in nabis-based products in the country. Ministry of testing the limits of where medical cannabis can Health now allows the import of high-THC flower go. In October 2018, Canadian producer Aphria for research purposes. More interesting still is the donated cannabis oils for a study undertaken by February 2019 deal struck between Blueberries Buenos Aires-based pediatric hospital Garrahan Medical Corp., a Colombia-based, Toronto-listed to assess the effect of cannabis on children with medical cannabis research firm, and Cannava, an refractory epilepsy, the first-such experiment of Argentine state-owned medical cannabis compa- its kind in Latin America. In 2019, another hos- ny to co-develop extracts and oils in the country’s pital, El Cruce, received approval from Argenti- northern province of Jujuy. Though Blueberries na’s Ministry of Health to conduct a clinical trial is heavily invested in Colombia and Argentina, on the use of cannabis in adolescents and adults it also hopes to use these markets as a jump- suffering from the same disease with help from ing-off point for the rest of Mercosur once that US-based HempMeds, who provided the oils. And body’s regulatory regime becomes clearer. In the in August 2019, Canada-based Canopy Growth meantime, as Raul Buriticá, a leading Colombi- reached an agreement with the University of Bue- an legal expert on cannabis regulatory affairs, nos Aires to promote further research on medical told TBY, the next big step must be the creation cannabis. of a great continent-wide association for every Other countries are rapidly catching on. cannabis-producing country in the region as a Though Brazil has yet to legalize cultivation, its platform for increasing awareness, exchanging Agência Nacional de Vigilância Sanitária has ap- knowledge, raising capital, and streamlining reg- proved regulations for the sale of medical can- ulatory regimes. ✖ Pharmaceutical & Medical 51 INTERVIEW people FIRST Focusing on R&D and studies on the potential uses and benefits of cannabis, Khiron places people at the center of its mission.

Martha Oyuela HEALTH VICE PRESIDENT, KHIRON LIFE SCIENCES CORP.

How many clinics does Khiron have? to be treated. First, the doctors have to go through The main objective of Khiron is to improve the that coaching process to understand they are in- Studies have quality of people’s lives worldwide. We want to dividuals themselves. Then, they have to learn shown that provide a comprehensive treatment for the dis- about the roadmap that each individual goes eases that each individual has, which is why Kh- through as soon as he enters into the clinic. cannabis can iron decided to create a portfolio of clinics. We help treat have a clinic that has been operating for a decade, What potential do you see for your products? children with but we acquired it two years ago. This clinic is fo- We have an interesting market study. We have cused on chronic diseases and is well positioned identified 5 million potential patients who can re- autism in neurology. We have two offices in Bogotá and ceive the benefits of medical cannabis. There are receive patients from all over the country. In many people with chronic pain who can benefit mid-December, we received the first patient in from that, including post-traumatic stress disor- Khiron’s our 1,200-sqm and four-floor clinic in the north- der, post-chemotherapy, and people with epilep- ern part of the city. This clinic provides services in sy, among many other pathologies. Cannabis has clinics apply pain, neurology, and surgical treatments. The ex- a huge potential for these services. comprehensive perience of the person that goes to that clinic has treatment model to be unique. This is a so-called comprehensive What agreements do you have with medical or scientific treatment model and focused on the individual. institutions? For us, we do far more than just treat illness; we We have made agreements with several scientif- look after and take care of the person. Individuals ic institutions in Mexico and Colombia. Through 5 million like to be treated like people, not patients. A per- these, we have developed a strategy of continu- potential son suffering from pain comes to us, and we pro- ous innovation and created programs of contin- patients can vide different services, rather than just focus on ued education. We have a program of internal their chronic pain. We are centered on a compre- medicine with different scientific institutions. benefit from hensive understanding of pain. We use integrated Additionally, we aim to develop some lines of medical medicine to support people, which includes acu- investigation. Cannabis users have to start using cannabis puncture, massages, cannabis, hydrotherapy, and this product through a specialist. There is a great other holistic services like mindfulness. deal to do in terms of cannabis research, so we want to implement new processes and studies to How do you prepare your doctors for these services? learn about the potential benefits that cannabis

We have two divisions. One is the pharma divi- can bring to patients. We are doing a pre-chem- BIO sion, which includes an e-learning platform to ical study in Uruguay to see how cannabis can Martha Oyuela is currently the train physicians on the use of cannabis. In our help children with autism and are on an ongoing Vice President of Health at clinics, there are specialized doctors who lead pre-trial phase. Khiron Life Sciences Corp. She held the position of director of each of our units. Everyone who participates in institutional development at the process obtains training and learns about a What benefits can this bring to the elderly population? the Roosevelt Institute and coaching process to understand how a person has Most chronic pain diseases afflict the elderly pop- marketing manager of Bayer. Additionally, she has worked ulation. Anxiety is also a big issue for them. It is throughout her career as a common to find older people with both chronic teacher and researcher. She “There is a great deal to do in pain and anxiety. Globally it is common to see is a physicist and surgeon patients seeking cannabis on the black market; from the terms of cannabis research, and a specialist in diagnostic however, that is a high risk, especially for older imaging and epidemiology so we want to implement people. We are developing an important cam- from paign with our partner institutions to promote and in bioethics from Javeriana new processes and studies University. She holds a medical cannabis. We are doing many visits master’s in health economics to learn about the potential to specialists to train them, and through those from the Pompeu Fabra agreements we conduct educational initiatives University in Barcelona and benefits that cannabis can is a gestalt therapist from like participating in conferences. We have many the Transformación Humana bring to patients.” lines of investigation. ✖ School. The Future in Cannabis Medicine

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In a bid to better understand the benefits of CBD on skin, SKIN Khiron was the first to conduct clinical trials on skin and provide doctors with greater insights. deep

Elsa Navarro SKIN UNIT MANAGER, KHIRON LIFE SCIENCES CORP.

What is the difference between medical cannabis and ing all the resources for research. Researching the Khiron is part of the CBD, the active ingredient in Khiron’s Kuida product? benefits of CBD on skin is not a priority for most There is a huge difference, not only between medi- companies; however, skin is a vital organ, and we cal cannabis and CBD, but between cannabis over- need to understand that CBD can be used to treat 1st all, medical cannabis, and CBD. It is important to it. We are looking to climb the ladder until we be- PPP that studies how be in line with regulation in that medical cannabis come a dermo-cosmetic or fully dermatological CBD can perform in is the one we are allowed to sell in Colombia in the product after doing the necessary research. dermatology framework we have established. CBD, one of the key components in the cannabis plant, is also an How is Khiron doing this research? active ingredient that has been approved for use in One year ago, when we launched Kuida, we real- Launched Kuida cosmetics. That is a huge difference because med- ized we had to do more research in order to deliv- ical cannabis requires a prescription from a doctor er reliable information for the consumer and the that guides a complete treatment, whereas CBD in general public, as well as doctors. Doctors need 1 cosmetics is open for use in a way that each com- to know what is out there. We created a skin unit year ago pany decides. That is something we have not truly at Khiron, and I am part of it. We signed the first clarified in our communication, though we are de- agreement in Latin America to do clinical trials fining CBD as a new active ingredient. The reason with CBD on skin. For us, it has been an amaz- we are hesitating is that one of the things that hap- ing milestone to carry out this trial, because we pens in the cosmetic world is that there are many did it with a public hospital in Colombia. This is ingredients being used because they are in fash- the first time a PPP is taking place in order to un- ion. We do not want that to happen with CBD. We derstand how CBD can perform in cosmetics and do not want it to be in the market where miscon- dermatology. ceptions could occur. First, we want to understand the performance of this active ingredient and the What is Khiron’s approach when it comes to communi- benefit it can have on skin. cating with people in the dermatological field? We are approaching dermatologists and working What are the benefits of CBD on skin? to explain to them the reality, which is the lack of There have been many preliminary findings re- research in the field, and inviting them to become BIO garding the effects of CBD on skin. One of the a part of it. The first step is letting them know there Elsa Navarro is currently most potent findings is its antioxidant action are many products in the international market the director of the skin unit of Khiron Life Sciences that relates to the process of fighting free radicals that claim CBD does wonders, though there may Corp., where she led the and the natural aging process of the skin. Still, it not be enough research to back up those claims. first cosmeceutical brand of is interesting because there is still comparatively Through our partnership with Colombian hospi- cannabis in Colombia, launched in October 2018, managing less research on what CBD does to skin because tals, we have gotten access to many dermatolo- to educate thousands of there are other markets in the medical side tak- gists and have started the conversation. We pre- consumers about the benefits sented the three lines of research we will conduct of cannabis CBD for the in the coming years, and in the last congress in skin. She is an international “When we launched Kuida, business administrator from Cartagena, we had the first symposium talking to the , we realized we had to do more doctors about what we know. We also interacted with more than 10 years of with other specialists from around the world. We experience in the development research in order to deliver and execution of marketing, are telling them we treat patients with medical sales strategies, and attracting reliable information for the cannabis and are working to develop their under- foreign investment for standing that our cosmetic cannabis in our over- multiple industries such as consumer and the general dermocosmetics, biofuel the-counter products may have a potent antioxi- agribusiness, and food and public, as well as doctors.” dant action. ✖ beverage companies. 54 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

HANKERING for the harvest

With over 10 years of experience, Cannabis Medical by Frank LaMadrid is a key player on the Caribbean coast specializing in the cultivation of medicinal cannabis.

Frank LaMadrid OWNER, CANNABIS MEDICAL BY FRANK LAMADRID

On which segment of the medical cannabis market is USD6 million per production center. Also, in terms Completing the company focusing? of human capital, we aim to offer 25 new job oppor- assembly of We are focusing mainly on taking the responsibility tunities per production center. All our efforts are ex- to improve the quality of life of the people interested, pected to produce results by May 2020. first indoor as the industry is growing constantly, and we know production we have the knowledge to share with the ones most What stage is the business in, and what progress will it center in a in need. Growing medicinal cannabis of high quality have in 2020? in a sustainable way is our focus and the most im- In this regard, it is important to mention three im- warehouse portant in creating varieties to treat diseases such as portant aspects. First, in cultivation, currently we measuring cancer, epilepsy, and depression, among others. have 10 years of experience, which makes us truly 2,400sqm proud to be one of the companies on the Caribbe- With such a great market opportunity and many com- an coast specializing in the cultivation of medicinal

panies investing in the sector, how will you differentiate cannabis. We expect to continue leading the indus- the brand and its products? try in this department to encourage development Aims to offer In terms of the varieties of cannabis, since the birth of the local economy. Second, in terms of patients, 25 new job of the medical cannabis industry, our commitment we have developed specific protocols on a national opportunities has always been to work according to and meet in- level, thanks to direct first-hand contact with many ternational standards in quality and social respon- patients. Third, personally, all these have boosted per production sibility. As such, we have committed with sacrifice center and dedication to acquiring our certification. Fur- thermore, we are currently finishing the assembly of “In terms of the varieties of

our first indoor production center in a warehouse of cannabis, since the birth of Committed to 2,400sqm. In addition, we are estimating total pro- duction in the first year to be 9,000kg of dried flow- the medical cannabis industry, the development ers and about 900 liters of different types of extracts. of the Caribbean Our objective is to build five indoor production our commitment has always region of centers in total during the first year, with more than been to work according to and 15,000sqm dedicated to growth. Colombia meet international standards What is your focus right now knowing that the market is in quality and social growing and moving extremely rapidly? Mainly, we are focusing on our main investments of responsibility.” Pharmaceutical & Medical 55

our motivation and passion to raise the profile of our and interventional aspects, which allow our patients medicinal cannabis industry thanks to our research, to enhance their beauty. Similarly, aesthetic inter- processes, and cultivation. Therefore, we are taking ventions are a worldwide trend, and Barranquilla is BIO special care of the plant’s properties to create ben- at the forefront in Latin America as a host city that Frank LaMadrid graduated eficial substances and products to treat particular is positioned in health services. The city offers the from Simón Bolívar University diseases. best conditions for the medical care that a patient in Barranquilla. He holds a master’s in esthetic surgery requires, including hospitalization and surgery ser- from John F Kennedy University In addition to the cannabis business, can you elaborate vices, as well as post-operative care for ample recov- in Buenos Aires and a master’s more on your surgery practice? What has been the key ery, after a vital or aesthetic medical procedure. The in anti-aging and aesthetic to the success of this business, and what specialties do above, of course, has had an impact on the increase medicine from the European Academy of Esthetic Medicine. they offer? of foreigners interested in our services that currently Lamadrid is a recognized and We are recognized as one of the medical aesthetic represent 90% of patients, and this has to do with 4K celebrated plastic surgeon teams with the greatest influence today, thanks to laser liposculpture and 4K abdominal marking. This and medical professional specializing in the areas of our professionalism, up-to-date techniques, and has also had an impact on international markets in- facial, body, and anti-aging technology for innovative procedures in medical terested in our portfolio. ✖ treatments.

With more than 10 years of experience in cultivation, Cannabis Medical Company by Dr. Frank Lamadrid has taken the responsibility of improving Building the future the quality of life of many people in the world by growing high-quality medicinal cannabis in a sustainable way and creating various varieties to in medical cannabis treat diseases such as cancer, epilepsy, and depression, among others. CRA 53 No 106-280 - Oficina 7A1 Buenavista Business Center - Barranquilla/Colombia - Tel: +57 304 5886971 - cannabismedicaldrfranklamadrid.com 56 Medical Cannabis Latin America & Caribbean Special Report FOCUS CBD

CBD: THE SINA QUA NON OF A GOOD NIGHT’S SLEEP?

WHILE SCIENTIFIC STUDIES ON THE PRECISE altogether, after which Medical Marijuana, Inc. became the first EFFECTIVENESS OF CBD ARE STILL IN THEIR company authorized to import the oil as a prescription medica- INFANCY, ITS POPULARITY IS SURGING ACROSS tion. That year alone the number of doctors prescribing it surged THE CONTINENT AS EVEN THE MOST RESERVED by 180% (to 320), while the number of registered patients able to import it into Brazil increased by nearly 2,500% from November REGULATORY REGIMES JUMP TO LEGALIZE IT. 2014 to October 2018. Meanwhile in the US, the Food and Drug Administration approved the first ever cannabis-derived medicine, Epidiolex, which contains CBD and was designed specifically to treat epilepsy, in June 2018. CBD is also widely believed to help patients suffering from anxi- CBD, OR , though the second most prevalent of the ety, insomnia, and chronic pain. Numerous studies, such as those active ingredients of cannabis, directly derives from both marijua- published by Medicines and Permanente Journal, suggest that CBD na and the hemp plant, a first cousin of cannabis (the only thing not only helps induce sleep, but also help patients stay that way. differentiating marijuana and hemp being their THC content). As One the one hand, some of the studies involve other cannabinoids such, not only is CBD’s chemical composition of a slightly different (naturally occurring compounds found in cannabis, of which there build than cannabis, but so is its legal status. In the US, for example, are thought to be 66 in total), making it difficult to give all the credit all 50 states have legalized its use and consumption to varying de- to CBD; on the other, since CBD is also thought to lower anxiety lev- grees, and there is talk of bipartisan support in the House for legal- els and chronic pain such as inflammatory and neuropathic pain, izing the hemp plant at the federal level, which would more or less this could also be the source of its somniferous aftereffects. legalize CBD for good in the world’s largest market. That is not to say the oil is without its own side effects. Though It has made headways across most of Latin America, too—serv- entirely non-psychic, unlike its cousin THC, side effects can in- ing as a “gateway,” legal means of acquiring cannabis derivatives clude nausea, fatigue, and irritability. It can also increase the level in the region’s two largest markets, Brazil and Mexico, and even of a blood thinner called coumadin, while also raising the level of being legalized in markets that have been far less forthcoming in other medications to the same degree that grapefruit juice does. getting on board the medical cannabis bandwagon, such as Pan- What’s more, since its legal status has yet to be set once and for ama. In Colombia, for example, where there were fears that the all (at least in the US) it is still mostly sold as a supplement, rather government of Ivan Duque might turn back the clock on cannabis than a medication, which limits doctors’ ability to locate the most liberalization, CBD has been fully embraced. As Rodrigo Arcila, the effective therapeutic dosage. President of ASOCOLCANNA, Colombia’s national medical canna- The same problem occurs in Latin America. In Uruguay, for ex- bis association, told TBY: “There has been full support from both ample, the only CBD medical product available in pharmacies and the president and the ministries regarding this industry… a clear hospitals is Epifractan, a 2% CBD extract used to treat refractory sign that the industry is moving forward.” What, then, is so extraor- epilepsy and central nervous system diseases or disorders, such dinary about this product? as Parkinson’s and amyotrophic lateral sclerosis (ALS). With many So far the derivative, which almost always takes the form of an patients complaining that 2% does not quite hit the spot, regula- oil, has been most singularly effective in treating more extreme tors and producers are now developing plans to release something forms of childhood epilepsy, such as Dravet syndrome and Len- with 5% potency. In Colombia, regulators have also capped CBD- nox-Gastaut syndrome (LGS), not only reducing the number of sei- based products at 1% potency. As Eduardo Montoya, CEO of Green zures, but at times stopping them altogether. This is one of the rea- Health, a Colombian company that merged with Canadian-based sons a Brazilian judge permitted CBD oil to be imported into Brazil Cannaverde Pharma, told TBY: “CBD is a powerful ingredient, and to treat a five-year old suffering from epilepsy in April 2014, while a we will be partnering with companies that already have estab- Mexican judge allowed its import to treat an eight year old suffering lished retail channels to bring CBD-based products to markets in from a similarly severe form of epilepsy in September 2015. Colombia and Latin America in 2020.” While the oil is clearly in its In the case of Brazil, at least, this landmark decision proved de- infancy as a prescribed and recreational medicine, its future is far cisive: in January 2015, the state regulator ANVISA legalized the oil from dim. ✖ Pharmaceutical & Medical 57 INTERVIEW

José Lugardo Espejel FOUNDER & CEO, SATIVA CARE

Why did you establish the first medical cannabis area, and since the beginning of the year clinic in Mexico City? we have seen close to 600 patients. This is a We wanted to inform people on the nature of small amount in terms of what we wanted to medical cannabis in a country that has yet to achieve at the beginning of the year because develop a fully integrated industry. We also our personalized initial consultations are wanted to introduce our population to med- lengthy, taking up to three hours. ical cannabis in a formal manner. The orig- inal plan had been to establish a dispensary What conditions see the greatest demand from the model because of the influence of the US, but clinic? we saw our country as a different one and felt Sativa Care treats patients with chronic pain, the need to prepare our team in order to help as well as Parkinson’s, Alzheimer’s, and peo- patients make more informed decisions about ple with mental health issues such as depres- BIO their health. That is how the project became sion or anxiety. Epilepsy is an area of partic- Before his current position as founder essentially focused on educating patients on ularly high interest. To this may be added a & CEO of Sativa Care, the first medical cannabis clinic in Mexico, José Lugardo the potential uses and limitations of cannabis substantial number of cancer patients, which Espejel was a researcher and consultant and how it can improve the quality of their is common. Cannabis has a fundamental in the private healthcare industry. lives, especially for chronic and degenerative problem as a medicine, and that is the fact He gained experience as a cannabis and counterculture entrepreneur in patients, which was the main mission behind that it is perceived as more of a commercial the US for eight years. He has an MS our first clinic. product than a medicine. We expect this to in biomedical engineering from the help boost investor appetite; however, we University of Florida and currently advises several cannabis start-ups and How many patients have you seen? want to stay true to what we think is good for regulatory agents. This clinic is not large. We have a 200-sqm patients. ✖ Medical Cannabis Latin America & Caribbean Special Report Image: Gaia Health

MEDICAL CANNABIS LEGAL SERVICES SECTOR, BY COUNTRY (POTENTIAL, USD MLN) SOURCE: GLOBAL INSIGHTS

Brazil Mexico Colombia 165 140 98

Argentina Chile Peru 50 47 16

POTENTIAL NUMBER OF MEDICAL CANNABIS PATIENTS (MLN) SOURCE: BIZ LATIN HUB

Mexico Brazil 11.7 16.5

CBD SALES ACROSS LATIN AMERICA (USD MLN) SOURCE: BRIGHTFIELD GROUP

2019 2023e Mexico 18 258 Colombia 4 57 Peru N/A 49 Brazil 14 40 Chile 3 22 Argentina 3 21

ANNUAL AMOUNT MEDICAL CANNABIS COULD POACH FROM PHARMACEUTICAL INDUSTRY (USD BLN) SOURCE: NEW FRONTIER DATA

2016 2019 4.41 4.86 Services & Technology 59

04 Services & Technology

THE ONLY WAY IS UP

ith total market value estimates of nearly tity is severely lacking. Even before medical canna- W USD10 billion, it will not be long before bis is fully regulated in Brazil, there is much to be the medical cannabis industry in Latin made for the one who can minimize CBD import America gives birth to a wide slew of remunerative costs and improve upon the country’s notoriously secondary services. For starters, this is because the difficult supply chains. regulatory environment is still so uncertain. With Colombia, on the other hand, has gone to much medical cannabis constitutionally legal but as yet greater lengths to regulate its industry, not only unregulated in one of the region’s largest mar- welcoming foreign operators and investors with kets, Mexico, growing cannabis will be far easier arms wide open, but also allowing self cultivation than legally getting it to market for at least several of up to 20 plants, a policy that hopes to give the years to come. And with medical cannabis markets country a robust home-grown market. Compli- expected to be worth USD2.4 billion in Brazil and ance with INVIMA, the country’s chief cannabis USD1.9 in Mexico, according to New Frontier Data, regulator, regarding oils, extracts, resins, and pure not to mention USD1.5 billion in Chile and USD1.1 cannabinoids will be key to any firm looking to billion in Argentina, markets that have liberalized take advantage of the Colombian market. And, as consumption but not production, the race to invest in any other large regional export-focused market, in the best tech advances, legal and compliance, competence in pricing, supply chain, and brand- security, and broader consulting and advisory ser- ing, in addition to regulatory compliance, will be vices will be just as crucial to developing the mar- key to determining the success of any such export ket as seeds, greenhouses, and horticultural labor. venture. With at least 13 million habitual consumers For a market under intense government scru- throughout the region, the domestic market is al- tiny, ensuring that business operations are fully ready large enough to support a vast new series of compliant will be an integral part of any firm’s services—including but not limited to adopting operating plans for the foreseeable future. But in good manufacturing practice (GMP) standards, a market with enormous initial competition, good better import/export supply chain and distribu- branding and good manufacturing practices are tion, consulting, education, branding, and regu- also crucial. Since the opportunity to build brand latory compliance. Start, for example, with Brazil, visibility is time sensitive, this is arguably the low- the region’s largest market with roughly 4.1 mil- est-hanging sectoral fruit from a service provider’s lion consumers. Though cultivation of medical perspective. In the medium and long term, howev- cannabis has yet to be fully legalized or regulated, er, firms and consultancies helping with technol- imports of CBD, which treats pain and sleeping ogy transfers and best manufacture practices will disorders, have been legal since 2015. Though over fare even better. For although Latin America has 80,000 units of CBD have been imported for more the regional edge today, this is hardly written in than 6,000 legal patients since then, these come at stone: governments in Lesotho, Zimbabwe, South exorbitant rates of up to USD250 per 20ml bottle, Africa, and Thailand are all moving forward with which last most patients merely one to two weeks. pro-cannabis cultivation and export policies that Most import and distribution are also carried out will force Latin America, despite its low production by private carriers contracted by exporters whose costs compared to Europe and North America, to

Image: Xxx ability to deliver on time and in the desired quan- act all the faster. ✖ 60 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

one step AT A TIME theracann INTERNATIONAL seeks to enable the global medical cannabis sector and believes Colombia must tread carefully if it wishes for the sector to have a prosperous future.

Chris Bolton COO, theracann INTERNATIONAL

What’s your corporate mission in Colombia? able under the ISO:17025 standard is a however, in our case, everything has to Our corporate mission is to stabilize the challenge. The problem is to find labs be done through wire transfers. international cannabis sector. So far, we that handle cannabis or are accredited have only had five years to stabilize the to do cannabis analysis. In case one does How do you see theracann INTERNATION- sector; in comparison, aeronautics had find a lab, the question is if that lab will AL’s future working with Colombian firms in 200 years and auto had 100 years. The buy or subscribe to a firm that is using the next five years? number of countries that have flipped to methods that other governments have Well, Colombia is at the crossroads, hon- legalization just over the last 24 months adopted. We purposely partnered with a estly. It has to start to demonstrate it can has further made it harder to convince firm to use their methods globally, which produce high-quality traceable canna- the international banking authorities are specifically developed for cannabis. bis, or it will get black-marked. Countries to allow money transfers related to the Next, we have the good management that get black-marked never come back. cannabis industry. Moreover, an equally practice (GMP); the problem is that dif- They just cannot get the confidence of an significant challenge is finding bulk buy- ferent governments have different stan- international jurisdiction that things are ers interested in repeatedly acquiring dards. Then, there are organizations that going to work well. The other challenge is high-quality cannabis products. In order are working to develop their own meth- that the Colombian banking system has to stabilize the industry, we had to find ods for all of this, called consumer-level a perception of the old days. We need to a way to control these projects. We built standards. We have large institutions like build the competence to show the can- a methodology called Benchmark SOLU- SGS as auditors that do this work them- nabis industry in Colombia is working TION, which is a consultancy service that selves. well. On the contrary, I have seen proj- plans, designs, implements, and manag- ects in which cannabis that should not es the facilities for a minimum five years. How are the banking and financial issues lim- be coming from a specific area is finding So unlike other consultancies, we see it iting the development of the industry in Co- its way. Why? Because the auditing in through a team that is present at the fa- lombia? traceability is not strong enough. We do cilities all around the world. This solu- I am surprised the sector even survived projects in which crop production and tion comprises five different of lines of this long without the banks. In Canada, quality controls are lacking, so there is business and each one has a director in we worked with Scotiabank, with which still a lot to be done. ✖ each country. So, all directors and teams we had a history of 14 years. Up until understand the regulation and processes November 2016, all operations were for any particular project. The industry is running smoothly, but then our account at a point now where large-scale whole- was flagged because it belonged to the sale opportunities are absolutely real. cannabis sector. We did not process or distribute cannabis, but we consulted in What’s the importance of certification to stabi- applications for cannabis and they gave lize the cannabis market? us 18 days to close our account. So, try-

That’s an absolute weakness. The vari- ing to scramble to get another bank ac- BIO ety of different standard requirements count was exceptionally difficult. That Chris Bolton holds a BA and an LLB from to manage the process from raw ma- said, many of the businesses related to the University of Calgary. His career terial to final product supply chain is the cannabis industry across the world has seen him take leadership positions in the fields of law, compliance, and huge. On the analysis side, just making face similar problems. Some of these project management for firms in Canada, sure that the date and labeling is reli- businesses have shifted entirely to cash, Panama, and Russia. Services & Technology 61 62 Medical Cannabis Latin America & Caribbean Special Report

IndicaOnline is a cloud-based point- of-sale (POS) solution to manage daily operations for medical marijuana businesses and dispensaries Image: Nader Ahmed, IndicaOnline Services & Technology 63 INTERVIEW poised FOR GROWTH “In less than four years, Helix TCS is a business we have reached quarterly services provider and a digital revenues of USD3.45 firm focused on technology, compliance, and security million, with 199% revenue solutions for the cannabis growth in 1Q2019.” industry.

Zachary Venegas CEO, HELIX TCS

What opportunities in the medical cannabis market be backed by a government stamp of approval drove you to create Helix TCS? that the aforementioned details are legitimate. Mexico’s My professional background has been highly Our critical infrastructure platform provides all climate allows invested in frontier markets. As these develop, these services in a single place, supported by the there are necessary components that must be data analysis that allows business, governments, year-round put in place to enable a truly open and trans- and investors the ability to track financial, opera- cultivation of parent marketplace, among whose components tional, and other market outcomes. The business cannabis at a are those infrastructure elements that enable to prove all of those points and the goal of our lower cost a regulated market to function properly. This is wholesale marketplace will be carrying that info especially critical in the cannabis industry, as with the product, regardless of where it ends up. than the US there are social equity, law enforcement, and so- This eliminates any ambiguity surrounding the or Canada cial cost concerns that do not exist to the same legal product, its quality, or ingredients so that degree in other markets and certainly not with businesses can source product from anywhere the same charged history. We recognized early they choose without taking enterprise risk in or- on in the development of legal cannabis that this der to operate efficiently. type of integrated critical infrastructure platform would be needed in order to create a global mar- What are the biggest challenges that new companies ketplace, which is our vision. We set out in late in the cannabis market face after entering the market? 2015 to build that vision based on those market One of the biggest is certainly the ever-changing opportunities. compliance requirements. Compliance is inher- ently complicated and carries a significant ad- What main added value do you offer to the growing Latin verse effect if not done properly. Add in an evolv- BIO American medical cannabis market? ing political landscape and you create a complex Zachary Venegas is CEO of Helix TCS. He oversees the We provide critical infrastructure services such set of requirements that are completely unique company’s M&A strategy and as seed-to-sale tracking, security, transport, and from market to market. All our services are tai- spearheads long-term planning wholesale marketplaces that are necessary to fa- lored to the unique operating requirements in and growth initiatives. Prior to joining Helix TCS, he led Spruce cilitate a global B2B cannabis marketplace and any given jurisdiction, so regardless of where our Investment Advisors’ strategic allow Latin American countries to realize the full clients operate, or where they plan to operate in advisory group. He was the economic and social benefit of their competitive the future, we facilitate their ability to generate co-founder and managing partner of Scimitar. In addition, advantages on a global scale. We are facilitat- revenue and safeguard their businesses. We cur- Venegas was founder & CEO of ing the transition from the black market to the rently provide seed-to-sale tracking services for Omega Strategic Services. He legal market, which means billions of dollars in dispensaries and grow facilities as well as govern- previously worked at JPMorgan in Geneva. He received his MBA revenue to governments, communities, entre- ment traceability through BioTrack, our leading in finance and international preneurs, and employees. As the global market technology services provider; security and trans- business from New York matures, product manufacturers or dispensaries port services through Helix Security, which is the University’s Stern School of in large consumer markets like the US will begin largest cannabis-focused security operator in the Business and a bachelor’s degree in classical Arabic and seeking ways to import products from competi- industry; and the oldest and only fully compli- Portuguese languages from tively advantaged markets. They will demand a ant wholesale marketplaces through Cannabase the US Military Academy, means of verifying that the product was grown le- and Amercanex. All these businesses function West Point. Prior to his business career, he served with gally by a licensed business and that the product together as a synergistic whole and create an un- distinction in the US Army as an carries verifiable test results, all of which must matched data source for the global industry. ✖ infantry officer. 64 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

MAXIMUM performance

With more than 102 years of experience, how How have innovation and investment in R&D do you evaluate the company’s main accom- been strategic to stay up to date in the indus- plishments so far? tries you serve? Western States’ main accomplishment Innovation is fundamental for Western is the installation, upkeep, and product States. Our skilled engineers continual- development of over 6,000 centrifuges ly strive to improve our products based worldwide. Though not all machines are on customers' expectations and needs. still operating today for various reasons, With technology evolving every day, Western States has long been a pro- our centrifuges are designed to provide ponent to never scrap a machine and maximum performance and maximum is committed to providing service and reliability while incorporating new pro- support to each machine in operation. gramming, monitoring capabilities, and Western States continues to innovate its safety features. Western States is com- centrifuges to provide the most techno- mitted to testing different solutions for logically advanced machines with the new projects and has a partnership with Ángel Paul Proaño greatest separation and throughput ca- leading engineering company in the can- DIRECTOR OF SALES pabilities to produce the highest-quality nabis space. AND MARKETING, product—no matter the industry. WESTERN STATES What impact will the growth of the medical Which are your main countries of operations, cannabis business in the US generate for the and where are you expecting to expand them? commercialization of your products and ser- The US is our main country of operations vices? Western States provides not for the sugar, chemical, pharmaceutical, Though centrifuge separation and ex- only quality centrifuges for and cannabis industries. However, we traction has been around for over 100 companies in the cannabis have a strong position with more than years, it is a newer endeavor in the can- 6,000 centrifuges installed across North nabis extraction industry. As companies industry but also a presence America, South and Central America, Af- are looking to find solutions to meet a and experience in other Latin rica, Asia, and Australia. Our established high production demand with the most American countries. presence in Latin America keeps us recovered oils and liquids, they will seek poised and ready to provide centrifuges an expert in the field. This industry has for the cannabis industry there. Compa- given Western States the opportunity nies operating in the cannabis industry to examine how its centrifuges handle in Latin America can benefit greatly from biomass materials and have allowed it Western States, as it provides quality cen- to enhance its already effective designs “Western States is trifuges to meet the high demand of sepa- even further to meet this specific plant ration needs because of our presence and material. committed to providing experience in those countries for other only original high-quality industries. What potential do you see in complementary cannabis sub-markets such as cannabis in- parts and the best How are you making sure to provide the best fused beverages, hemp-based oils, cosmetic solution for rebuilds and part, rebuilds, and upgrade services for canna- products, and others? bis centrifuge systems? As the world becomes more receptive to modernizations of all its Western States is committed to providing the potential of cannabidiols and their centrifuges.” only original high-quality parts and the benefits to the endocannabinoid system best solution for rebuilds and modern- in humans and in animals, the sub-mar- izations of all its centrifuges. We have a kets of the cannabis industry are set to 24-hour emergency hotline for parts and explode. CBD and hemp-based products service to support our customers. The have been shown to reduce a wide range ability to stock parts on site gives us the of ailments from stress-related anxiety all BIO opportunity to provide immediate ship- the way to relieving epileptic episodes. Ángel Paul Proaño is the director of sales and marketing of Western States. ment, and our established international People are interested in learning about With a degree in business administration logistics department is knowledgeable the long-term effects of ingesting CBD and management, he has a background in customs procedures and document through various methods, be it tinctures, in sales, management, global quality preparation to get our parts anywhere in edibles, or oils. The more high-quality techniques, and political knowledge. His extensive experience and knowledge the world. Furthermore, we have dedicat- products available to the consumer, the have allowed him to advance with ed service engineers trained in both me- better for the industry to receive approval opportunities to hold positions such as chanical and electrical problem solving and acceptance. Getting these products general manager, sales manager, and executive director in US and foreign who are available for factory visits and produced safely and legally is paramount companies. inspections in as little as 24 hours. to the success of the cannabis industry. ✖ Automatic Botanical Centrifuge

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Giadha Aguirre de Carcer FOUNDER & CEO, NEW FRONTIER DATA

What is the global cannabis environment like for hemp and cannabis in the world. Not trade. While Europe presents the best ex- today? only is medical port opportunities today, it will be inter- There are over 50 nations that have ei- experiencing fast growth there, but B2B esting to see how both Canada’s fast-in- ther legalized or decriminalized cannabis demand is also set to potentially increase creasing domestic adult use and medical in the world today; outside of Uruguay, much more rapidly as large FMCG enter- demand, as well as the US potential feder- eight US states, and Canada, they are all prises in sectors such as beauty products, al legalization, open additional export tar- adopting the medical use of the plant. As apparel, beverages, and edibles are now gets and opportunities for Latin American noted in our recent The Global Canna- exploring or introducing hemp- and CBD- nations in the near future. bis Report—2019 Industry Outlook, New based products. Frontier Data estimates that in 2018 the Have there been any surprises in your cannabis global cannabis total addressable retail How does Latin America and Colombia fit into market research to date? sales market was USD344 billion, with the global cannabis marketplace? Since founding New Frontier Data in today’s total number of both legal and Given the surge of demand underway in 2014, and while having put together a illegal users totaling approximately 266 Europe, Canada, one of the most mature team of economists, industry analysts, million consumers worldwide. The sale cannabis markets in the world, has posi- and technologists mostly experienced in and the production of hemp, the canna- tioned itself to meet such demand. Euro- more traditional regulated sectors such as bis non-psychotropic cousin from which pean nations are unable to cost effectively energy, government, sugar, and tobacco, CBD extraction is also possible, has ex- meet said demand due to decreasing ag- there has not been a day where one of us perienced a 20% CAGR for the past five ricultural land and relatively higher labor has not been surprised by an unexpected years, double-digit growth on par with costs. Canadian exporters, while experi- finding. Most recently, we have begun to some of the fastest-emerging markets in encing their own domestic production assess preliminary research suggesting the world. While North America is still challenges, have now begun to look at hemp may not only have medical appli- considered the epicenter of the industry, Latin American nations to complement cations, which continue to widen as far as regions such as Europe and Latin Ameri- their export volume to Europe, starting conditions treatable by CBD-based med- ca, the foundation of the cannabis market with Colombia. Latin American nations icine, but also fairly advanced industrial today, are beginning to take center stage. have optimal climates in which to grow applications. Beyond textile production Europe now has 29 legal markets, all for hemp and/or cannabis, for the most part and even widely adopted soil regeneration medical use, and is potentially set to have are already seasoned agro-based econ- and cleaning properties, hemp seems to the fastest-growing B2B and B2C demand omies, and can offer much lower labor also have battery life extension and con- costs. While New Frontier Data has iden- ductivity properties and applications. ✖ tified Brazil as having the largest con- “While North America sumption market potential due in part to BIO Giadha Aguirre de Carcer is founder and is still considered the its population size and current support CEO of New Frontier Data, a Blazing Hot from both government and populous for Weed Tech Company to Watch, as noted epicenter of the industry, medical cannabis, countries like Colom- by PCMagazine in 2017. An entrepreneur bia and Mexico present potential for fast- with over 20 years of experience in regions such as Europe business execution, management and er growth in their export markets rather strategic business development, de and Latin America, than domestic ones. Nations such as Co- Carcer has worked in finance, research lombia that have experienced both social and analysis, intelligence collection, the foundation of the and reporting and as a senior strategic and economic challenges stemming from consultant in multiple industries across cannabis market today, widespread illicit cannabis cultivation both commercial and government are more rapidly and expediently, if not sectors in the US and abroad. de Carcer are beginning to take and her work have been featured in aggressively, positioning themselves to Forbes, Fortune, CNBC, Fox News, CNN center stage.” compete in the global cannabis and hemp Money, and other top news outlets. 68 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

Coen Esser With boots on the ground in more than 70 MANAGING DIRECTOR countries, Control Union Certifications is FOR COLOMBIA uniquely placed to manage challenges in AND CENTRAL AMERICA, CONTROL UNION COLOMBIA today’s global evolving cannabis industry. ENSURING quality and consistency

“The cannabis industry as well as its buyers standard, which is globally available. The pillars on which CUMCS-G.A.P. was built are Good Ag- will go beyond legal requirements and ricultural and Collection Practices (GACP) and embrace compliance and responsibility- Good Agricultural Practices (GAP). Obtaining the CUMCS-G.A.P. certificate makes a farm GACP related standards verified by third parties.” compliant, a necessary requirement when aim- ing to sell to pharmaceutical companies. In ad- dition, Control Union offers existing certification programs for hemp certification destined to the dietary and food supplement industries, such as Control Union is a global leading certification body and USDA NOP. Many principles from the traditional service provider to commodity markets. Could you pro- soft commodity markets also apply to cannabis. vide a short introduction? In an industry that is rapidly shaping itself and Control Union is a Dutch-based group of fami- needs to standardize many of its quality aspects, ly owned companies that offers services through including laboratory testing, sampling protocols, several global business lines, amongst other cer- the need for third parties to verify sampling, and tifications, inspections, logistics, and collateral many more, Control Union’s century of experi- services. In Colombia, we have been active for ence serving commodity markets with a broad more than 17 years, serving many of the tradi- range of services allows us to contribute to setting tional agri industries such as sugarcane, palm these standards. Finally, in order to offer GMP au- oil, bananas and other fruits, and coffee, among dits, we partnered with Blue Inspection Body from others. Control Union certifies plantations and Germany, a Dakks (Germany) accredited leading companies in these industries in a wide number GMP auditing company. of standards, ranging from organic certification, Bonsucro, ISCC, GLOBALG.A.P., RSPO, and many To what extent will certification help medical cannabis more. Recently, we added to our portfolio the sole growers receive FDI or find partnerships? BIO standard globally available for medical cannabis: The goal of CUMCS-G.A.P. is to ensure top-qual- Coen Esser holds a MSc in international business Control Union Medical Cannabis Standard-G.A.P. ity product and consistency in production. More administration from RSM (CUMCS-G.A.P.). importantly, it will tremendously help companies Erasmus University in gain visibility and organize their internal structure Rotterdam. Before joining the Peterson & Control Union From palm oil, coffee, sugarcane, and fruit, how did Con- and processes. CUMCS-G.A.P., unlike guidelines group, he worked in a variety of trol Union enter the medical cannabis sector? such as GACP, allows for objective auditing rely- industries within DSM, amongst Cannabis is a crop that is currently being legalized ing on established mechanisms and criteria when other the pharmaceutical API antibiotics industry. Currently, in more and more countries. Control Union’s vast it comes to determining non conformities, how to he is managing director for experience in agriculture enables us to serve this resolve them, or audit frequencies, just to mention Control Union Colombia & emerging market with new solutions. The first some important elements. We do not simply pay Central America. Since his arrival in Colombia in 2018, he medical cannabis standard was developed in Is- a visit and issue a compliance document; there is has been involved in the local rael as part of the regulatory framework for can- much more involved. A farm may lose their cer- medical cannabis industry. nabis farmers. Control Union was closely involved tificate if they do not meet the same standards in His previous experience in in building the Israel Medical Cannabis Standard subsequent visits—there are four visits a year. This the pharmaceutical industry, combined with Control Union’s (IMC-GAP), allowing to independently audit is to continuously ensure pharma-grade medical leading position as a key medical cannabis farms by third parties. Since no cannabis quality that everyone eventually wants service provider in the global standard existed for this purpose, IMC-GAP was to get. commodity markets, allows him to contribute to shaping the created. Consequently, using IMC-GAP as a blue- new medical cannabis industry. print, Control Union developed CUMCS-G.A.P. Control Union has a presence in more than 70 coun- Services & Technology 69

tries and a 100%-owned private equity model. How does this impact the fice, where a certifier objectively evaluates the report and a cer- growth of the company, specifically in Colombia? tificate is issued in case the farm is compliant with the standard. 2020 marks an important milestone for our group since we cel- Our international quality standards, operating procedures, and ebrate our 100th anniversary. Our global presence and recog- accreditations ensure consistency in the service throughout the nition by the different governments and accreditation bodies, different countries. as well as by our client base, gives us a phenomenal position to expand new services in international markets. Being privately What is the importance of being accredited by the RVA from the Nether- owned and organized in a decentralized manner makes us more lands as well as SLAB from Sri Lanka, the ASI, the US Department of agile, allowing faster decision making and giving us the ability Agriculture (USDA), and other accreditation programs? to offer tailored services to our local clients. This is important, Accreditation is the foundation of our existence as a certifica- given the fast pace with which the medical cannabis industry is tion body. In order to be able to audit and issue a certificate, we evolving. must abide by strict protocols, avoid conflicts of interest, ad- here to the highest level of quality standards and procedures, How do you provide on-field agricultural services in the medical canna- and much more. This is verified by accreditation programs. As bis industry? a certification body, Control Union developed CUMCS-G.A.P. Globally, we have almost 1,500 agronomists within Control to have both a standard and checklist that enables third-party Union. We work mainly with in house trained auditors instead audits and certification of cannabis farms, contrary to guide- of relying on contractors. In Colombia and Latam, an outstand- lines like GACP and GMP, which lack such structure and gov- ing team of auditors with vast experience in auditing a large va- ernance. Since our accreditations demand us to be impartial in riety of standards, has been trained specifically to be auditing our audits, we cannot perform implementation services to these CUMCS-G.A.P. and gain familiarity with cannabis as a crop. farms. Moreover, Control Union certificates are recognized by We audit a plantation or cannabis farm on an operational level, 150 governments. Yet, CUMCS-G.A.P., like the medical can- check standard procedures, compliance with local legislation, nabis industry, is relatively new. It will take some time for this farm layout, whether people have been trained well and how it standard to be well known globally, though it is already being is documented, and the hygiene of the facility, amongst other adopted by numerous companies in different countries in Lat- practical things. An audit report is then sent to the certifying of- am, Colombia included. ✖

This standard is based on:

1. The World Health 2. Guidelines of the Dutch Organization (WHO) Government for Cannabis for guidelines: WHO Guidelines Medical Use: Guidelines for on good agricultural & cultivating cannabis for medical collection practices (GACP) purposes, The Netherlands, for medicinal plants - December 2002 Geneva 2003 3. International Standard 4. GACP – European Medicine for Good Agricultural Agency Guidelines for Starting Practices G.A.P. standard Materials of Herbal Origins

The goal of the CUMCS-G.A.P. is to ensure top quality product and consistency in production.

ROL UN T IO N N O C

S D CONTROL UNION MEDICAL TANDAR Medical Cannabis CANNABIS STANDARD CUMCS

CUMCS-G.A.P: the sole certification standard dedicated Latin America: [email protected] to the Medical Cannabis industry. The standard covers all North America: [email protected] cultivation and post-harvest steps of the value chain and Europe - Africa: [email protected] is in full compliance with both GACP guidelines as well as Asia: [email protected] Good Agricultural Practices (G.A.P). certification.controlunion.com 70 Medical Cannabis Latin America & Caribbean Special Report Image: Clever Leaves Image: Clever Services & Technology 71 INTERVIEW

Mauricio Name C E O , GARDEN SUPPLY SOUTH AMERICA

How is Garden Supply South America working “Our goal is not only to facilitate growth and make a positive impact on developing the cannabis sector in Colom- the cannabis market; bia? we are also looking at As the CEO of another cannabis compa- ny and a producer and exporter, I was in the food industry and need of products that were nowhere to flower market.” be found in the entire country. I looked up and down in Bogotá and Medellín and could not find anything to support 100. I, therefore, advise everyone to do it what I needed to do. I was familiar with right the first time because if not, they will the registration of fertilizers and inter- waste hundreds of thousands or even mil- DOING national importation of fertilizers, how lions of dollars. Our goal is to help people to distribute, bottle, and label them, and get it right the first time. We will also have so on. I finally realized I should bring in a department of consulting for customers it right these products, as Colombia is an emerg- that make large purchases, in addition to ing market where they are needed. Haw- distributing greenhouses. There are a few thorne has been acquiring companies in manufacturers of greenhouses in the US There’s often no better the industry for the past four years and that we will import from as well. We will person to supply a gap in spending hundreds of millions of dollars also sell automation systems for green- on firms like Sunlight Supply, Gavida, houses and nutrient lines. Our goal is to the market than yourself. General Hydroponic, Botanicare, Moth- make sure everyone, from those growing er Earth, and others. It also carries other their own personal plants to commercial brands as well but does not own them growers, has what they need to be suc- exclusively. We approached Hawthorne cessful and produce an incredible quality and reached an agreement to exclusively of cannabis. Our goal is not only the can- sell all its products in South America. Our nabis market; we are also looking at the port of entry will be Barranquilla. We can food industry and flower market. also drop ship directly from the US into other countries in South America accord- What is your advice to investors or growers ing to the order and size. seeking to start in terms of what they need to fulfill their earnings potential? What challenges will cannabis companies face If an investor is investing millions of dol- operating in Colombia, and how can Garden lars into a company, I would advise them Supply help address them? to make sure they know the climate ex- To grow in an outdoor environment, tremely well and that they cultivate in one requires resistant genetics, specifi- a greenhouse because the conditions cally only two different kinds of strains. in this country are extremely difficult. They are limited in production of differ- There are airborne pesticides, insects, ent medications. There are some 43 ter- and heavy metals in the soil, so there are penes in cannabis, and not every genetic many things that growers need to be care- strain has those. All these terpenes affect ful of. They can prevent all that by having the body in different ways too, so if one’s a greenhouse and a fully automated sys- cultivation is limited to two strains, then tem with supplemental lighting, which they might not have access to the rest of will increase their yields. There is also BIO the terpenes to produce their spectrum of the lack of feeding. A great deal of canna- Mauricio Name studied architecture medication. My goal is to have access to bis here is light and not dense, which is at Depaul University as well as the all those terpenes, and in order to do that, from a lack of nutrients. Growers cannot University of the Incarnate Word, we need a fully acclimated greenhouse. find the nutrients here, and we can help under a full athletic scholarship. He is a successful entrepreneur who has It will be an indoor-outdoor production by not only providing the right nutrients been a founding member of firms in the with supplemental lighting, de-unifica- and equipment but also the experts to construction and agriculture sectors, and tion, and air conditioning. It will be ex- help them along the way, educating them is the owner of MMC Construction LLc. He has served as CEO of Natureceuticals pensive to do in the beginning, though about our products and the benefits of LLc since 2018. the rate of return on investment is 50- using them. ✖ 72 Medical Cannabis Latin America & Caribbean Special Report

05 Events

THE BIG SHOW

he tremendous growth of the medical ed its 4th and largest iteration, bringing in over T cannabis industry has naturally been 200 exhibitors from over 30 different countries to reflected by the growth and internation- the island. CanEx also launched its series of in- alization of its accompanying events industry. vestor summits in New York, London, Tokyo, and Trade shows and events in medical cannabis at other global financial hubs. the start of the decade were few and far in be- Colombia also experienced a number of firsts tween and were lucky to attract more than a few in 2019. Marijuana Business Daily’s Latin Amer- dozen exhibitors. 2019 however was another ban- ican Cannabis Symposium, hosted in Bogota, ner year, both in terms of event attendance and was its first event in the region. Meanwhile, Ex- expansion. Lift &. Co’s Toronto 2019 surpassed poCannaBiz held its inaugural event in Cartage- its previous record of 20,000 attendees, and Mar- na, and already announced plans for the second ijuana Business Daily’s MjBizCon Las Vegas 2019 ExpoCannaBiz Cartagena in May 2020, as well as event reported over 35,000 attendees, up from its first expansion into Brazil, ExpoCannaBiz Sao over 28,000 in 2018. Paolo in April 2020. While these events have attracted key players The rapid growth of such events, as well as throughout Latin America and the Caribbean, their increasingly international attendee and ex- 2019 was also a great year for locally held events hibitor audience, is a testament to the growing in the region as well. Former Mexican president momentum and investor appetite for the region. Vicente Fox hosted the first edition of CannaMex- While events in any sector are important for the ico at Centro Fox in San Cristobal, Mexico. Mean- spread of best practices and connecting investors while, CannabisSalud hosted its 3rd international with entrepreneurs, it is particularly important congress on medical cannabis in Mexico City. for a young industry with such a promising but CanEx Jamaica, held in Montego Bay, conclud- uncharted future. ✖ ChapterEvents Name 73 Image: arindambanerjee 74 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW A TIDAL WAVE of opportunities

Since its founding in 2011, MJBizDaily has been a regional and global pioneer in reporting and analysis for the cannabis market.

Cassandra Farrington CO-FOUNDER & CHAIR OF THE BOARD, MARIJUANA BUSINESS DAILY (MJBIZDAILY)

Founded in How do you see the cannabis sector today in terms of event and attract people to Colombia. We have political will, investor confidence, and public perception always taken the approach that this is a genuinely compared to when you founded the company in 2011? full-on global phenomenon. We will not neces- 2011 When MJBizDaily started in 2011, it was a small sarily go into each individual country with its own niche market that basically encompassed 16 indi- unique symposium, event, or news product. Oth- vidual US states that had medical marijuana pro- er countries worth keeping an eye on in the Latin In grams. Since then, that number has expanded to American market include Brazil, which has great well over 30, and if we count CBD and hemp activ- opportunities. It is the largest in the market in terms ities, almost every US state has some sort of canna- of patients and the amount of legally sold product. 2019, bis legalization legislation on its books. Countries That is definitely a country to watch as it continues hosted its first Latin such as Uruguay and Canada and many of the US to implement changes to its medical cannabis pro- American event in states have also moved toward recreational use. In- gram and how it continues to regulate and manage Bogotá, Colombia ternationally, the understanding of cannabis, both that moving forward. Chile is another interest- from a medical and wellness perspective and from ing one to watch. It has had an ad hoc market for an economic perspective, has simply exploded. We many years now via . Many other have gone from a market that was a tiny niche to countries in Latin America and the Caribbean are something that is receiving mainstream attention, taking a wait-and-see approach or getting wrapped as it rightly should. And this comes with investment up in internal politics about how to legalize and interest, political will, economic opportunities, and regulate cannabis. We will have to see how quickly the advocacy and social justice elements. In the last those countries move forward. Uruguay is another eight years, there has been a tidal wave of under- country to keep an eye on. It was the first country standing and opportunities for everyone involved to legalize recreational marijuana, which is a big and everyone who can benefit from this industry. step. Up to this point, Uruguay has taken a patient- and consumer-safety approach, which has stymied Why did MJBizDaily choose Colombia for its first event in business opportunities and is a perfectly valid ap- Latin America? proach to take. However, it is now looking at retool- We chose Colombia after looking around at the ing some of its policies. various markets because we felt it provided the best opportunity due to its location and first-mover When some of the larger markets like Mexico, the US, and advantage in Latin American markets. A great deal Brazil update their legislative framework, what impact will of economic development has already taken place it have on the global cannabis industry? in the country. Colombia’s market is by no means The US is the one to watch. It has been a global eco- fully mature, but it is one of the leaders among the nomic driver in so many markets for many decades. markets in Latin America. There are many great When the US market gets its act together, it will un- opportunities in Colombia, and a great deal of at- leash opportunities around the world. The US is tention is on the country as a gateway to the rest of capitalism at its finest, and no one does capitalism BIO Latin America. We are a part of that. MJ Biz Daily quite like the US, for good and for ill. However, at Cassandra Farrington is the co- wanted to take part in this trend and fuel it as well. the same time, as the US goes, so goes the rest of founder and chair of the board the world. Until the US resolves its banking situa- of MjBizDaily. She was also As MJBizDaily expands its presence in the region, what tion, it will continue to negatively impact the global the company’s first CEO until stepping down in October 2019. other countries do you have an eye on for future events market. So many banks have deep ties to US regula- Previously, she was the vice and symposiums? tions and cannot risk their business by banking the president at Citi. She earned MJBizDaily is likely to continue having a bench- cannabis industry; this situation will continue to be her MBA from the University of Texas McCombs School of mark event in Colombia annually. That is our in- a huge setback for the cannabis industry as long as Business. tention at this point. We want to truly market that it persists. ✖ Events 75 B2B INTERNATIONAL EVENTS While legalization is key to ensuring growth in the cannabis industry, education is another important step to grow support and investment for the burgeoning industry.

How do you support the cannabis industry? Through a partnership with Enlighten, a leading technology and media provider Matei Olaru MATEI OLARU Prior to legalization, we in the US, we will expedite the launch of CEO, partnered with Mothers Against Drunk Lift & Co.’s US product listings site. We LIFT & CO. Driving (MADD) Canada to develop see a great opportunity in Latin America, CannSell, a cannabis retail training certi- but expanding into that region is not an fication, now utilized in eight jurisdictions immediate goal. With the sector being in Canada. We are also the mandatory re- so new, there is still much for us to do in tail training provider in Ontario, with ex- our existing markets. Ultimately, our goal clusive approval from the province’s can- is to establish our business model as an nabis regulator, the Alcohol and Gaming example in this industry. As you can see Commission of Ontario (AGCO). We will from the international representation, continue to work with governments at all exhibition, and attendance at our current levels, and with private and public retail- events in Toronto and Vancouver, the in- ers across the country at the retail level. dustry already operates at a global scale. Cannabis education is at the core of our Every year, more and more people are legacy at Lift & Co., and we will continue to coming not just from the US, but from all push that forward through CannSell. Im- over Europe and Latin America. For now, portantly, this platform also gives Canadi- we are the Canadian event for the global an licensed producers a trade marketing cannabis industry, which is keenly watch- channel through which they can speak di- ing Canada’s legal framework evolve. We Lorena Beltrán rectly to budtenders about their products. will also do more retail interactions. Retail FOUNDER & DIRECTOR, This is integral as brands look to establish is ramping up across Canada; Ontario, CANNABISALUD themselves with consumers because the Canada’s most populous province, will budtender plays a key role in a consumer's be opening its cannabis retail networks in education and purchase decisions. 2020.

LORENA BELTRÁN We decided to create an LB Mexico will serve as the biggest plant annual event for the industry in 2016 be- producer and product manufacturer in cause society needed to have more infor- the global cannabis market, as it already mation on the matter and its impact prior does in the automotive and aerospace to the 2017 law. We created an internation- industries. The country is not a large con- al congress bringing experts from around sumer in comparison to countries like the the world to start breaking the negative US, which means that Mexico has more stigma among health professionals. We potential to be the number-one export- focus on science and medicine. Chang- er of regulated cannabis and its derived ing the law without educating people can products in the world. Cannabis can be- create many problems. Our idea is also to come one of the most important indus- help health professionals understand the tries in the country. In the US, scientists plant and its benefits, as well as develop have invented a huge machine in which Mexican companies in the industry so as one can put in tons of raw materials like to avoid simply importing the product. We plant stalks and leaves, and it seamless- have started to see more national interest ly separates the raw matter into different and involvement. Unfortunately, regula- materials such as, fiber, lignin, and cellu- tions take time, especially in these mat- lose, which can be used to make paper, ters, due to the lack of knowledge. plastic, textiles, fuel, and construction ma- terials, just to mention a few. Such tech- What lies in the future for the company and the nology in Mexico and Colombia would cannabis industry? thrive thanks to the thousands of tons of plant material available. Mexico can also MO We have recently announced plans incorporate this technology to fully take to expand into the US through a strategic advantage of the country’s potential. We alliance with Marijuana Business Daily are a country of manufacturers, and there (MJBizDaily) to collaborate on our lead- are many products that can be created ing conferences in Canada and the US. from cannabis once it is legalized. ✖ 76 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

ONCE AND for all The broader goal is to change the perception of a market from one focused on illicit movement to one focused on the highest quality legal trade.

Julián Tobar CEO, EXPOCANNABIZ

Can you tell us the main results of ExpoCannabiz and its than 2,500 people attend, compared to 1,500 in 2019. Over 2,500 contributions to the industry in Latin America? Everyone left with such a great feeling that I antici- people expected Held in May 2019, ExpoCannabiz was a great event pate them returning next year and mentioning their in 2020 in terms of networking. The feedback we received satisfaction to others. We expect to keep growing from people was also very positive. Everybody really and bringing in great speakers that can teach us all enjoyed the conference and made some meaningful about the industry. I want to make this event a Latin

connections. This is what it is all about. The industry American one that defies national borders, i.e. the ExpoCannabiz is extremely new, and our main focus is to bring peo- event for industry players across the entire region. plans to become ple together to learn and grow. We did an excellent job and noted the mistakes that were made in order Which companies would you like to target, and what is the B2B event of to improve next time. In 2020, our event will be even your perspective on what is required to keep building up Latin America bigger and better. this event in Latin America? The major companies play a major role in our expos Why is ExpoCannabiz important in Colombia, and what because they are the event sponsors; they are the en- is your main motivator? gines for this. The smaller companies can start mak- Brazil and The main motivator is to make sure Colombian ing contacts and get the ball rolling in their favor. Central America companies become sustainable and have better This is the hardest part, because they have to get out potential opportunities to meet investors and potential buy- there to meet new people and clients. It is an excel- markets for ers. Colombia is recognized for the quality of its lent outlet for people from Europe, Africa, Asia, and products and its production capacity. Now, we can North America to come to Colombia and explore the industry growth change the perception of market from one that is opportunities to buy from local growers. This is the focused on illicit movement to one focused on legal main area of work and focus. trade. We can use the reputation we have developed and leverage it for our benefit. We can go from a Why is ExpoCannabiz the ideal space for giving greater well-known illicit to a well-respected licit market. exposure to Colombian growers? Our goal is to create cannabis that is appreciated all We have invested a great deal of capital in advertis- across the world and bring an excellent product to ing inside and outside of Colombia. We have secured the end-consumer. a great space, and the Cartagena Convention Center is hands down the best place to hold an event in the What are your main expectations for what is coming up? country. The cost of the ticket also filters the type of In 2020, we have a few events planned, which is people coming to the event. Inexpensive events can BIO great. Since Cartagena was such a great event, sev- attract crowds that are not as interested in investing Julián Tobar is an entrepreneur with extensive experience in eral sponsors decided we needed to do something in and networking. By making our event more expen- the insurance industry. He is Brazil. We will hold an event from April 29-30, 2020 sive, we ensure we are getting more B2B visitors. the founder and CEO of Global at Hotel Maksoud in São Paulo, the first we are hold- Insurance & Associates, Tobar Do you have any additional strategies to reach interna- enterprises Inc, and Tobar ing outside of Colombia. Being in a different market Investments LLC, as well is a challenge that we hope to take full advantage of. tional markets? as the cofounder and CFO of We expect at least 600 people to attend the event My key strategy is attending as many events as pos- Ethnothecarium Botica Natural, from around the São Paulo area. Attendees will learn sible. I go to an event at least once a month, some- a cannabis farm and extraction lab in Colombia, and cofounder about the sector and find new opportunities. For our times twice. These can be in Canada, the US, and and CEO of Expocannabiz. main event in Colombia in 2020, I expect to see more Europe, though there is also one coming up in Cape Events 77

Town. By doing so, you get to meet more people What can we expect for the next event, and what do you from the industry since many of the largest players have in your pipeline? attend these events. I am interested in tapping into the Brazilian and Cen- tral American markets. The idea is to do an event that How can these spaces become an educational platform will rotate because the markets are not as big. One for the industry, and how can this influence the knowl- year, we could do an event in Uruguay, while the next edge of the general public regarding this industry? could be in Peru. By having events rotate through Right now, I am more focused on B2B. There are smaller markets, we can ensure there is a strong col- other conferences focused on the medical side, laboration and development across the region. ✖ and these events will truly make headway in terms of liberating people from the stigma surrounding cannabis. This will decline over time as more people “The main motivator become aware of the benefits the plant can bring. is to make sure Right now, we want to make sure the business side is sustainable. This will be essential for the long-term Colombian companies growth of the industry. We want to help companies become sustainable and develop. It used to be that keeping information se- cret made companies powerful; now sharing infor- have better opportunities mation makes you powerful. We want to help com- to meet investors and panies interact and share their knowledge because this will stimulate the industry to new heights. potential buyers.” 78 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

FROM THE HAMMOCK to every shelf

Douglas Gordon FOUNDER, CANEX JAMAICA

CanEx Jamaica held its fourth edition in 2019. “We do not have the How have you seen the climate around the in- dustry, both in Jamaica and globally, change in luxury of waiting for the last four years? things to happen; we have CanEx in 2019 was extremely fulfilling. We set out on a mission to expand beyond our to get out there and make core of producing a top-notch event and them happen ourselves.” excellent networking to present a confer- ence experience that would truly show- case Jamaica in a broader context. We feel of the local industry. Jamaica has a pop- a sense of accomplishment based on the ulation of 2.9 million people, but over 4.3 Jamaica will always have feedback from our attendees. They ap- million tourists come every year. Being a distinct advantage in the preciated the fact that we had world-class able to service a market exceeding seven industry, but it can still hone speakers, industry-leading experts, deci- million in is a huge opportunity for a small sion makers, and leaders and executives country. The ability to move the needle its unique legacy to better fit actively seeking opportunities to partner on GDP, and particularly GDP per capita, contemporary expectations. and do business. We wanted to set our- is fairly substantial. In terms of outbound selves apart from other conferences so that potential, our proximity to the equator and people could have a full experience, incor- hours of natural sunlight help lower pro- porating elements of Caribbean culture, duction costs. The other aspect is that we great parties, and networking events to have a workforce here that understands attend and overall rounding out the entire the plant. There is more to growing can- experience. As far as where the industry nabis than putting plants in the ground. is going and what we have noticed, it has We have to impart and exchange knowl- really evolved. The first CanEx saw people edge with folks who already have expertise who had submitted license applications growing cannabis over many years, which and were somewhat frustrated by the slow would position Jamaica to produce both progress; however, they now have full flower and oil for global markets. farms up and running. It is truly remark- able to see how the industry has evolved What has been the investor feedback during in the past four years. We keep pushing to CanEx regarding the challenges of the local make the process move faster, especially cannabis sector? in the Caribbean, where we want this part There is a different speed of doing busi- of the world to participate fully and bene- ness in Jamaica than in other countries. It fit from the industry. We do not have the tends to be a point of pain for people who luxury of waiting for things to happen; we want to do business here, particularly in have to get out there and make them hap- an industry that is moving so fast. Busi- pen ourselves. Even though we have a long nesses also have to navigate the fact that way to go, at least we can take stock and many people want smaller farmers to be express some gratitude for where we are able to participate, but now it is about im- now and keep moving. parting knowledge and laying a roadmap as to how they can do so. It can be difficult As other countries in the region work to estab- for someone whose true love and passion lish their local markets, what must Jamaica do is solely in farming to tackle the full spec- to remain at the forefront of the sector? trum of considerations in running a legal Due to its cultural heritage and the work cannabis business – with everything from

BIO done by many icons—Peter Tosh and Bob negotiating leases and understanding Douglas Gordon has almost 30 years of Marley, for example—Jamaica will always compliance, not to mention security reg- experience in finance, the media, sales, have a distinct advantage in this industry, ulations. There is an education process and marketing. He began his career in albeit from an adult use perspective; how- taking place now to bring that to fruition. commercial banking with the Bank of America. In 2016 he founded CanEx ever, it has tremendous benefit in terms of A great deal of foreign investments coming Jamaica. tourist arrivals, participation, and support in are heavily focused on exports. ✖ Events 79 INTERVIEW capital CONNECTIONS In business as in life, who you know is often just as important as what you know.

Carol Ortega CEO, MUISCA CAPITAL GROUP

It has been a few years since the medical cannabis in- industry ecosystem in LATAM, so we decided to dustry started flourishing in Latin America. How do you open a specific branch for the cannabis industry Muisca helps perceive it? after coming from real estate and tech. Our firm entrepreneurs, We have been serving the industry in the US for realized that an international networking group several years, and we have realized that most of was needed for everybody in the industry to meet, start-ups, and the companies that are mature in North Amer- offer their services and products, and do general expanding ica are looking to expand their operations and business. That is why we decided to create and or- organizations services. That is why we started looking at Latin ganize the Cannabiz Latino Hub-Impact Invest- find a reliable America as a big opportunity. When Colombia de- ment Summit & B2B Expo. We decided to hold the cided to legalize medicinal cannabis back in 2016, first edition in Colombia because of the maturity source of capital. we started our operations there. Colombia and of the market here. We gathered 148+ accredited Mexico are likely to lead the industry in LATAM investors from all over the world, an event that since both have the knowledge and experience took three years of planning; it was not easy, but in cultivating in such climes. There is a learning we made it. We really wanted to do it right and curve that is going to be difficult to catch up for professionally, following the best practices of the other countries in the region; the geographic ad- venture capital industry. We wanted to put 100% vantage also makes Colombia and Mexico attrac- accredited investors in front of all the beautiful tive. initiatives in Colombia. It turned out to be really successful. How does Muisca support these initiatives in Latin America? You also founded and organized CannaCiencia, a two- We focus on providing venture capital and fund- day scientific cannabis symposium. Can you tell us more raising services. We help entrepreneurs, start- about this? ups, and expanding organizations find a reliable, CannaCiencia is the world’s first cannabis scien- sustainable, and strategic source of growth cap- tific symposium in Spanish. It is bilingual and we

ital. We perform a strong due diligence process offer the opportunity to give a speech in English BIO and make sure the company receiving the funds is or Spanish. It was born mainly for two reasons. Carol Ortega Algarra is founder sustainable, fulfills all legal requirements, has an One, to empower Latino scientists and cannabis & CEO of Muisca Capital Group. experienced and honest team, a clear mission, a related research. We wanted to create a platform She is also founder & president of the Foundation Network of clear path, sales, and traction. Then, we decide if for them and show the world what Latin Ameri- Cannabis Entrepreneurs of we should offer our services. One of our most rep- ca is doing; yes, we are doing science! One of the Colombia, which promotes, resentative transactions up to date was an M&A of results of our first event was the creation of the through its programs and services, cannabis ventures in a dispensary chain in California valued at USD250 framework for analytical testing for the industry Colombia. She is an educator million. This has positioned our firm as one of the in Colombia. This is crucial for the patient and and defender of the Latin leading organizations in terms of financial struc- also for the entire success of the nascent industry. American cannabis legal industry in North America and turing for M&As in the US, not to mention fund- Through CannaCiencia, we continuously educate Colombia and has experience raising. the government, doctors, patients, and entrepre- as a consultant in start-ups neurs. One of the biggest challenges in Latina and companies. She is the Muisca Capital Group organized the first cannabis in- America is the stigma and fear around cannabis. winner of several international awards in which she obtained vestment summit in Latin America. Did it meet your ex- We wanted to show Latinos that there is a tremen- the first place in the fast pitch pectations? dous economic opportunity that can be reached competition space generated When we started our operations as a manage- by everyone in our beautiful and vibrant Latino by the Portland Social Venture Society. She has also stood out ment investment firm, we realized we needed community around the world. The stigma and as a researcher in the field of an investment-related networking space for the fear should not stop us! ✖ her profession. 80 Medical Cannabis Latin America & Caribbean Special Report

06 Investment Spotlight

FRESH GREENBACKS

hough cannabis equity valuations took a larger company with a market capitalization of T beating in the US and Canada in the au- USD7.3 billion, struck up a partnership with the tumn of 2019—with some dropping as Barranquilla-based pharmaceutical Procaps to much as 40-50% on their March value—the long- focus on joint education and R&D projects to de- term investment potential for the medical can- velop high-quality medical cannabis derivatives. nabis sector remains extremely robust. Though “This accord,” Canopy Growth’s CEO Mark Ze- it does seem unlikely that cannabis will over- kulin said, “gives our global production chain an took soft drinks by 2030, as some analysts pre- instantaneous capacity to soon provide the en- dicted in 2018, enormous opportunities are still tire Latin American market with a wide variety of abound to get in a dynamic market early—es- high-quality medical cannabis derivatives.” pecially as some of the market’s earlier “giants” As valuations for Latin America’s total medical have already taken their initial sophomoric beat- cannabis market surged from USD125 million in ing. This is one of the reasons New York-based early 2018 to as high as USD13 billion by 2028, so Northern Swan merged with Clever Leaves, a has interest in some of the region’s largest play- leading Colombian player in Latin America’s ers. Canadian-Colombian Khiron Life Sciences, cannabis market, in November—adding the lat- for example, now has agreements in nine region- ter’s Bogotá offices to its critical presence in New York, Frankfurt, London, Lima, and Portugal, giving the combined partnership the global scale “As valuations for it needs (under the name Clever Leaves) to be- come an international brand. Latin America’s medical It was in this same spirit that Cannaverde, an cannabis market surged ambitious young Canadian cannabis company, acquired Bucaramanga-based Green Health Co- from USD125 million in lombia at the end of 2018 and its seven licensed early 2018 to as high as hectares on which to grow the green stuff. There is an option to add another 100 acres as that USD13 billion by 2028, so partnership grows. And the Canadian love affair has interest in some of the with Gran Colombia hardly ends there. In June 2019, Canada-based Canopy Growth, a much region’s largest players.” InvestmentChapter Spotlight Name 81 Image: Plena Global Holdings Inc.

al countries while running one of the continents largest grow operations, with nearly 9 million sqft under cultivation. While Pharmacielo, an- other Canadian firm with operations centered on Colombia, saw its stock market cap reach USD180 million by December 2019, Toron- to-based Avicanna’s dropped by 75% to USD35 million, making it a bargain for those looking to get in on the ground floor. Though Canadian-Co- lombian Medcolcanna’s stock was down by 65% in 2019 to a market capitalization of USD8.5 million, the company not only completed its 250,000-sqft greenhouse in Cota, Colombia, but also signed an R&D agreement with the Univer- sity of Groningen in the Netherlands to conduct clinical trials on the effects of different cannabi- noid formulations on human diseases. Finally, younger Colombian firms such as Manizales-based Green Queens and Huila- and Bogotá-based Cannagustin are also gearing up to make a big splash once they find the right in- vestment partners. Green Queens, for its part, is located smack in the heart of the Eje Cafetero, not only one of the richest agricultural zones on the planet, but also merely 100km from two in- ternational airports. As CEO & President Juliana Trujillo told TBY, Green Queens is focused on far more than Latin or North America; “Our plan to continue this growth is to focus on the organic cultivation-side of the business for the medical cannabis industry in Oceania.” Cannagustin is also eagerly looking for smart capital to expand its promising operations and obtain a national registry of cultivators to allow it to launch its first commercial crop from 2021 onward, in addition to building additional green- houses, CEO Daniel Molano told TBY. As the new year beckons, so do some of the region’s biggest opportunities. ✖ 82 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

fulfilling the FUNDAMENTALS Inexpensive cultivation costs, ideal growing conditions, experienced labor, and strategic locations close to major consumer markets arguably make Latin America the most attractive cannabis market on earth. César Gutiérrez MANAGING PARTNER, BASTION CAPITAL ADVISORS (BCA)

How is BCA transitioning into the medical can- stands the uniqueness of the industry, the termine the likelihood of adding value nabis sector? value drivers, and how to quickly make to companies, deliver as promised, and BCA is a boutique investment bank fo- decisions that are translated into a new match investors’ requirements. Investors cused on providing M&A, capital raising, and stronger deliver skillset. are our clients too, and they have instruct- and corporate strategy advisory services ed us clearly on their investment goals, across Latin America and the Caribbean. What would you say to investors in Canada or so we need to carefully select companies Few years ago, it was evident that entre- the US who are looking at Latin America? that fully fit our mandate. A well-defined preneurs were struggling to be profes- With a population of nearby 620 million path to turn strong business plans with sionally served by investment banking people, Latin American is poised to be- clear competitive advantages, juicy finan- firms, mainly due to a misconception come a global leader for supplying the cial projections, and nicely elaborated about the industry and its reputation. world’s cannabis market, based on the investment decks into sustainable profit- We have learned the main singularities of competitive advantages our countries able and cash generators companies are, this emerging industry by spending time possess such as inexpensive cultivation indeed, the keys to success. Scalability for listening to and speaking with people costs, ideal growing conditions (12 hours integrating with other verticals, a man- around the industry and traveling to dif- of natural light), agriculturally experi- agement team capable of delivering with ferent markets to understand first-hand enced labor, and strategic locations close consistency, and a solid corporate gover- the production process, its transforma- to major consumer markets. Since Uru- nance framework combined with a posi- tion to finished goods, and the wide vari- guay’s legalization of cannabis in 2013 tive impact in the communities they op- ety of benefits that cannabis can bring to and Colombia’s in 2017, neighboring erate in are also fundamental. Investors our lives. Our track record of over 60 years countries have approved their regula- have strengthened their decision-making of combined experience in successfully tions for medical cannabis. In late 2019, process to finance projects. Now, man- closing transactions with global reach sets for example, Brazil approved the import agement needs to keep focused on run- us apart as the one-stop shop for M&A of medicinal cannabis, thus becoming ning the operations while M&A advisors leaders in the region for impacted indus- the largest consumer market in the re- execute the transaction, an extremely tries, helping companies reach their po- gion. Mexico is also exoected to legalize time-consuming process. ✖ tential while the international investing all forms of cannabis in the first half of community achieves its investment goals. 2020. All these, coupled with a projected market size of USD13 billion by 2028, half What are the biggest challenges that medical of which is expected to come from medic- BIO cannabis entrepreneurs in Latin America have inal cannabis, and another approximately César Gutiérrez is a senior executive in raising money? USD13 billion from hemp, signal the size with 20-plus years of experience and From a regulatory perspective, there is of the opportunity to take advantage of. successful track record in executing M&A, capital raising, and corporate still confusion regarding what licenses Not to mention the benefits to broader strategy deals ranging from planning, are required for each part of the process economic development, whether in the structuring to financial close, in different countries. From the project form of production, processing, retail, integrations and beyond. He founded Bastion Capital Advisors in 2013. Prior perspective, we have seen how the lack digital, or other ancillary services. As an to this, he was part of KPMG Global of robustness in structuring projects example, in Colombia alone more than Infrastructure based in Canada. He not only from the technical side but also USD400 million has been invested since was also vice president of M&A of from a strategic and financial perspective the legalization. the largest F&B conglomerate in the Caribbean. Gutiérrez holds an MBA definitely impair project credibility. Past from IE, a master’s in corporate finance, experience will be always important, es- What indicators do you look for to determine if a and a bachelor’s degree in accounting pecially if it comes from precision agricul- project is worth taking on? majoring in financial management. He has lectured on M&A and investment ture; however, what investors really look Before taking on any transactions, we banking at the most prestigious business for is a management team that under- internally assess the opportunity to de- schools in Colombia.

CONTACT Managing Partner, +571 746 2129 César Gutiérrez Bastion Capital Advisors (BCA) [email protected] Bastion Capital Advisors is a boutique BASTION SERVICES investment bank focused on providing • Mergers and Acquisitions M&A, Capital Raising and Corporate • Sell side Strategy advisory services for mid-market • Buy side entrepreneurs, emerging companies and • Leveraged Buyouts qualified investors seeking to navigate • Management Buyouts impacted industries. With a team of • Fairness Opinions seasoned executives committed to client’s • Spin-offs long-term success, Bastion Capital Advisors • Capital Raising provides unbiased advice, deep industry • Equity Placements knowledge and global reach. • Debt Placements • Structured Finance • Project Finance • IPO Advisory bastioncapital.co • Corporate Strategy • Strategic Business [email protected] • Project Structure • International Development +571 746 2129 • Corporate Finance • Due Diligence 84 Medical Cannabis Latin America & Caribbean Special Report INTERVIEW

Juliana Trujillo CEO & PRESIDENT, GREEN QUEENS COLOMBIA S.A.S.

What have been the main accomplishments of dellín makes of this region an ideal op- Green Queens so far? tion for this emerging industry. 2019 moved quickly for us. We were able to apply for the four licenses to the What strategies do you have to continue reach- Ministry of Justice and the Ministry of ing international markets and stakeholders? Health, and early October, we received At the moment, we are building up a sol- a favorable concept in the visit to the id network, which is important in this property from the Ministry of Justice. We business. We want to stay up-to-date have developed a solid business plan to on opportunities and news from other approach new business partners. Our markets. It is easy to find people who de- plan to continue this growth is to focus sire to be part of this business, but it is on the organic cultivation side of the difficult to find the right people to work GREEN business for the medical cannabis indus- with. We must make sure that any future try in Oceania. partner shares the same values and fun- damentals we have. This is the only way means What approaches do you have planned in to create synergies between the people order to bring high-end and key partners to who will be part of our project. I lived in Green Queens? New Zealand for more than 10 years and action This is an extremely competitive mar- know the culture and dynamics of Ocea- ket and measuring up against others nia well. There are also other key factors requires a great deal of knowledge, re- when thinking about this market. Aus- Green Queens is focusing on search, and talent. So far, one of the suc- tralia is one of the largest destinations for attracting the right talent and cesses we have found in this business medical cannabis products from Cana- working on a solid business has been working as a team. We are tak- da; its annual prevalence of cannabis is plan to grow further in this ing our time to look around and build up around 10% compared to 3% worldwide. booming new sector. a strong network that allows us to know Australia is also the global leader in or- the market better and find the right busi- ganic agriculture based on certified or- ness opportunity based on product dif- ganic hectares, which means that there ferentiation, high quality, and exploring is high sensibility and acceptance in the new markets such as Oceania. We are lis- organic market. tening to people with great ideas on new techniques for organic cultivation pro- What will be the role of medical cannabis in cesses and so on but lack the resources the economy? to develop them. We are convinced that I see it as an industrial movement. We “There are multiple developing an organic crop is the best are talking about improving the quality option for the plant, final consumer, and of life of many people around the globe, ways this industry will the environment. We need to develop an as well as the number of jobs and the change people’s lives.” organic ecosystem where all the factors revenues this industry can bring to the are interrelated and contribute to the country. It also improves the quality functioning of a chain of processes. We of life of the people of our community, need to understand and respect the cy- through different options of cultivation, cles of nature. better education, higher salaries, and more opportunities. There are multiple Why base the business in Manizales? ways this industry will change people’s Manizales is our hometown, and this is lives. However, the hemp industry also where we live; however, most important- benefits our ecosystems and environ- BIO Juliana Trujillo studied business ly, Manizales is located in the heart of the ment. Hemp has served as an import- economics at the Autonomous coffee zone. Its core economy is agricul- ant raw material for the manufacture University of Manizales. She also holds ture, plus it is safe and has public order of ropes, canvases, textiles, paper, and a postgraduate diploma in marketing that few regions in the country have. It petroleum products, among others. It is from the University of Auckland, New Zealand. From 2019, she started as CEO has fertile soil, it has a strategic location a whole change for the economy and a & co-founder of Green Queens SAS. with two international airports within game changer for Colombia’s reputation Additionally, she has 14 years of work 100km, free zones, and a great deal of regarding drugs, namely shifting from experience in the commercial, marketing, and customer service areas, including commuting between the coffee zone and illegality to formalized, legal cannabis nine years abroad. the main cities of Bogotá, Cali, and Me- production. ✖

CONTACT CEO & President, +57 3108835696 Juliana Trujillo Green Queens Colombia S.A.S. [email protected] Investment Spotlight 85 INTERVIEW

Cannagustin’s long-term straight to goal is to become one of the leading exporters of high- quality cannabis derivatives THE in the region. MARKET

Daniel Molano CEO, CANNAGUSTIN

Where did the name Cannagustin come from? What is your opinion of the impact of cannabis-based The name comes from a town called San Agustin drinks and oils? Focusing on near the Pitalito region, where we are based. San Our research shows people in Colombia are open commercial Agustin is home to some ancient monoliths. The to these products. Given the importance of such site was excavated, and archeologists found up to products in the market, the government should cultivation 3,000-year-old engraved stones that belonged to take the opportunity to establish the necessary the San Agustin and Tierra Adentro cultures. It is an framework. With regard to edible products, there incredible region with beautiful landscapes, picto- are a number of gaps to be filled. The edible mar- grams, stone engravings, and sculptures. The region ket represents huge potential if the government is known for its ancient tradition of cannabis culti- can ease regulations. Industrial hemp is another vation and use, and this motivated us to name our segment that can help us diversify our portfolio. company Cannagustin. Which Colombian cities have the greatest potential for What added value do you offer to the Colombian market? the development of a medical cannabis company? One of our added values is that we register Fuente In major cities like Bogotá, Medellín, and Cali, Semillera, a licensed seed or germplasm bank au- there can be an important development in terms thorized by the Colombian government. Moreover, of the use of medical cannabis by patients; how- we are committed to applying global best practices ever, some regions such as Boyacá, Cundina- to all our current and future cultivation processes marca, Antioquia, Valle, Cauca, Meta, and Huila because our end goal is also to be able to export our present greater potential for crop development. derivative products. In addition, we have qualified Our operations in the Huila region, in Pitalito, professionals with experience in the cannabis in- enjoy a competitive advantage, as we are only dustry. a 10-minute drive from the Pitalito airport. Our other headquarter is in Bogotá, a key place for BIO What are your medium- and long-term plans? the cannabis industry given the number of events An industrial engineer with a green belt certification in Our medium-term plans are to consolidate our- that take place there on a regular basis. Also, the Lean Six Sigma, Daniel Molano selves as a leading company in the south of the majority of key players across the value chain are has 13 years of experience country in cultivation and extraction of cannabis present in Bogotá. in process optimization and management in addition to six products. In the long term, we want to become one years of experience in creating of the most important companies in the region in What are your goals for 2020 and 2021? and developing innovation the export of high-quality cannabis derivatives. We hope to acquire the necessary capital so that systems, value propositions, and innovative business in 2020 we can start the adaptation and agro- models. He also has experience What kind of products will you initially launch? nomic evaluation tests of some of the genetics we in developing and directing The first products we aim to introduce are full-spec- have registered. With this, we would obtain a na- RDI projects and teams. He trum oil and distilled THC and CBD oils, after which tional register of cultivators, allowing us to start is a professional focused on continuous improvement we want to launch CBD and THC-A isolates, all of a commercial crop from 2021, for which we will through the efficient use of which will be high-quality intermediate deriva- require additional capital for the construction of resources and optimization tive products. We then plan to go one step further greenhouses and an extraction plant. Our first tools, best practices, and taking a systemic approach and introduce finished products such as tinctures, extraction of derivatives should be in mid-2021, with applicable policies and drops, consumer products, and hemp products. when we expect to go to market. ✖ legislation.

CONTACT CEO, +57 3166307517 / +57 3017539639 Daniel Molano Cannagustin [email protected] CARING FOR HEALTH IS IN OUR NATURE

PIDEKA is the first and only licensed indoor producer with a tissue culture laboratory and a solvent and solvent-less extraction lab (to be eGMPcertified) with an experienced management team that has expertise in all functional areas of cannabis production.

We submitted 55 strains of seeds to the regulator (ICA) before it closed the window in December 2018. 28 of those strains are THC/CBD, 5 are CBD dominant, and 22 are THC dominant.

Pideka has an established history as a leading medical producer who has treated over 2,000 patients on the back of extensive research and database of treatment studies.

WHERE TO FIND US PHONE NUMBER BORJA SANZ DE MADRID +57 314 298 8905 www.pidekagroup.com Investment Spotlight 87 INTERVIEW

Diego Triana FOUNDER & CEO, executing VIRGIN CANNABIS the RIGHT STRATEGY The ability to constantly overcome adversity is one of the most powerful tools in emerging sectors of volatile industries.

Can you tell us how Virgin Cannabis was born? Our profile is industrial people that believe in busi- For Virgin Cannabis was born four years ago when we nesses that bring value to society. In the past, we began to explore how extraction could have a pos- have built companies in the chemical field and itive impact on health for different medical affec- always focus on producing goods with high stan- 2020, tions. We have more than 30 years of experience dards and eco-friendly raw materials that add val- Virgin plans to receive building a chemical company for different indus- ue to our clients and employees. As this is not the extraction licenses tries in LATAM, and Virgin Cannabis is our new first business we have developed, we are looking proposition for the industrial group. We are pursu- for an investor that trusts our "glocal" strategy with ing a vast industrial improvement for the pharma local execution. Intends to make business with top of the line technology and work- donation of ing to be positioned as a unique Colombian brand How have you used previous experience to make Virgin for a worldwide market. Cannabis a better company? Colombia is a country full of opportunities, yet 10% What have been your main achievements with Virgin Can- since we are an emerging economy, we face a high- of its sales to nabis? ly volatile environment, especially in the industrial Make-A-Wish Colombia Our greatest achievement thus far has been ex- sector. We see this status quo as one of our most perience, knowledge, and people. We have been valuable know-hows. Our ability to overcome ad- studying cannabis for the past four years because versity and build strong companies can save large we realized that if we were going to enter the busi- sums of time and money when building new proj- ness, we needed to have a strong know-how on the ects. In other words, we have the knowledge and subject and experience, which has been our way to potential for growth with Virgin Cannabis. build strong companies in such a volatile time and market. It must also be stressed that people are our What strategies does Virgin Cannabis have to provide most important asset and the only way to build a added value to its services and products? competitive company. We are strategically located in the town of Choc- ontá, near Bogotá, where the environmental con- Can you highlight some of the particularities of your ex- ditions, air quality, land quality, and abundance traction process? of water are unique to developing and growing Our extraction process is top of the line and fully our top-line raw materials. On the other hand, our GMP-certified. We add value by blending formu- strategy and main focus is to offer products of high lations of extremely high-end quality cannabis for purity with the Made in Colombia brand. This will the pharma sector. In addition, every time we ex- be made with fully GMP equipment, as well as a tract, the process helps us train local people with technical and chemical staff that can satisfy the new knowledge in order to develop our country. needs of the market. BIO Diego Triana has a BS in What role do certifications and innovation play in your Does most of your workforce in your facilities come from materials technology and international strategic work? Chocontá? marketing from the University It is everything. All our certifications—the GMP, the Yes, the operative part of cultivation comes from of Northampton in the UK. He gear that we are buying, ISO, and ISO 9001—are key Chocontá, and we are constantly giving new op- has also completed advanced to selling our products abroad and achieving ca- portunities to local people. In the future, we plan to finance studies at the Chamber of Commerce of Bogotá. With pacity and credibility of having unique, high-quali- connect our social program with the people from experience as an entrepreneur ty products for the industry. Chocontá, which only has 25,000 people, most of and worker in the chemical whom work in agriculture. Chocontá is close to the sales sector, he has led Virgin Cannabis, a company Why should foreign investors and companies invest in a start of the Bogotá River, which gives us access to he founded and where he is company like Virgin Cannabis? excellent quality water. ✖ currently its CEO, since 2018.

CONTACT Founder & CEO, +57 310 7920963 Diego Triana Virgin Cannabis [email protected] 88 Medical Cannabis Latin America & Caribbean Special Report Image: Gaia Health

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