News Roundup July 2018

A monthly summary of the key events taking place in the Colombian medicinal cannabis industry

Financial

Canadian FloraMed Holdings acquires CannaMed Colombia
CannaMed Colombia, a cannabis company based in Antioquia, was acquired in early June by Canadian company FloraMed Holdings. According to the M&A agreement, CannaMed Colombia, including its assets such as lands and processing plants, was acquired in its entirety by the Canadian holding and now functions as a branch of FloraMed.

Canopy Growth Corp. enters the Latin American market
On July 5th, CO-CEO of Canopy Growth Corp. (TSX:WEED) Mark Zekulin announced the company’s entrance in Latin America in a press conference in Bogotá. Canopy Growth acquired Colombian Cannabis SAS, a local cannabis producer lead by CEO Bibiana Rojas, now renamed Spectrum Cannabis Colombia. Canopy Growth also announced the creation of Canopy Growth LATAM, a regional company whose purpose is to seek opportunities for Canopy Growth to continue growing in the continent. The company expects their research labs in Chile, together with their 126ha land in Colombia, will lead the company’s Spectrum model to regional success and expansion.

Colcanna SAS receives major licenses, and is in a pending acquisition process with Scythian Biosciences Corp. (TSX:SCYV)

Colcanna SAS is the first company to receive a license to cultivate cannabis in the Colombian coffee zone. Earlier this year, Scythian Biosciences Corp. announced it had entered a binding letter of intent to acquire MMJ Colombia Partners, an Ontario-based company, which is expected to purchase 90% of Colonna before the acquisition of MMJ. This transaction is subject to the definite agreement over the terms on the LOI, which include regulatory and TSX:V approvals.

MYM Nutraceuticals Inc. (MYM:CSE) to acquire part of Colombia Organica SAS
MYM Nutraceuticals entered an Investment Agreement to acquire a stake of 49% in Colombia Organica SAS, a Colombian cannabis company with licenses to produce, commercialize, export, and sell seeds for low THC cannabis. The acquisition was worth CAD2.5mill, representing a stake of 49% in compa- ny ownership and 50% of voting shares. The payment will be disbursed in three phases: one after license, quota and permit verification (650,000 CAD), then on September 1st after budget approval(650,000 CAD) and, lastly, the balance will be paid through MYM’s purchase of equipment for the production facility.

Agreements

Aphria (APH:TSX) signs exclusive sup- ply agreement with Colcanna SAS
In May, Aphria announced its exclusive supply agreement with Colcanna SAS, a Colombian company licensed to produce and import cannabis products. Ac- cording to the agreement, Aphria is the exclusive supplier of cannabis products for Colcanna in the Colombian market and Colcanna will purchase medical cannabis products from Aphria exclusively.

Khiron secures endorsements with 3 major medical associations
During the month of June, Khiron (KHRN:TSXV), a few weeks after listing in TSX:V, was able to secure an endorsement with the Colombian Association of Internal Medicine (ACIM), the Colombian Association of Neurology (ACN) and an exclusive strategic alliance with the Latin American Institute of Neurology and the Nervous System (ILANS). This last alliance for research and consultancy represents an increase of about 100,000 potential patients for Khiron, the majority located in Colombia which, given Khiron’s focus on patient data bas- es, will give the company a significant advantage over competitors.

Regulatory

INVIMA takes a step in favor of canna- bis companies
Decree 1156/2018, issued by the Colombian Ministry of Health, represents a major change in the Colombian drug registry regulation. According to this De- cree, phytotheurapeutic cannabis products are no longer required to enter the sanitation registry supervised by INVIMA and may be sold freely in all pharmacies and drug stores. INVIMA is still required to issue complementary regulations for cannabis-based products.

Licensing

Khiron receives approval from ICA

After securing three alliances with major medical associations, in June Khiron also registered as an agronomical unit with the Colombian Agriculture Institute (ICA). Besides representing a significant advance in requirements to cultivate and distribute medicinal cannabis, this authorization allows ICA to start testing the 19 strains in Khiron’s application. An- other significant advantage for the Canadian company as it is expected to be the first to distribute cannabis products in Colombia.