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Latin American Governments Seek Cannabis Legalization to Aid in War on Drugs
NEW YORK, May 15, 2019 /PRNewswire/ -- The War on Drugs has ravaging Latin America, causing thousands of deaths each year along with social and political unrest rife throughout the region. Governments poured in large investments towards launching initiatives and developing tactics in order to effectively reduce crimes related to drugs. However, they quickly came to the realization that traditional methods weren't having the desired effects on crimes rates. As a result, many countries within the Latin America region begun to decriminalize and even legalize some drugs entirely. Notably, cannabis is amongst the most rapid growers. Countries such as Argentina, Chile, Colombia, Peru, and most famously, Uruguay, have all adopted some form of cannabis legislation. Uruguay was the first nation ever to legalize cannabis entirely, allowing for both recreational and medical use. However, even while countries like Argentina and Colombia have not legalized recreational use, the two nations have moved to decriminalize cannabis, allowing for moderate personal consumption. Many activists believe that full legalization will significantly reduce crimes and death rates associated with the war on drugs. Mexico's Senator Olga Sánchez Cordero, who has been picked as interior secretary by president-elect Andrés Manuel López Obrador, believes that cannabis prohibition has led to violence and poverty within the country. Throughout the years, Mexico and the U.S. have had a long history with drug trafficking, however, should Mexico legalize cannabis, it would join Canada as well as a number of U.S. states within the rapidly expanding North American cannabis marketplace. According to data compiled by the IMARC Group, the North American legal cannabis market was valued at USD 8 Billion in 2017. By 2023, the market is projected to reach around USD 35 Billion while registering a CAGR of 28% from 2018 to 2023. Blueberries Medical Corp. (OTC: BBRRF) (CSE: BBM), Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), PharmaCielo Ltd. (OTC: PHCEF) (TSX-V: PCLO), Khiron Life Sciences Corp. (OTC: KHRNF) (TSX-V: KHRN), Sorrento Therapeutics, Inc. (NASDAQ: SRNE)
The North American region is the largest cannabis player in the global market. In particular, the U.S. is a major growth driver for the industry because of its early adoption of recreational cannabis. While the U.S. has not fully legalized cannabis, its individual states are granted the jurisdiction to decide whether to legalize cannabis or not. The U.S. is expected to maintain its dominance over the next several years, however, its market share is then expected to dwindle as more countries move towards legalization. Specifically, countries such as Germany, Italy, and Australia are all positioned to hold a significant market share as their medical cannabis programs mature. Moreover, the South American region also represents a large global medical cannabis market as in 2018, the South American medical cannabis market was valued at USD 125 Million. By 2027, the market is expected to reach USD 776 Million due to its liberal cannabis regulations, according to Arcview Market Research and BDS Analytics. "There's a tendency for new governments in Latin America to be more liberal overall," Luis Armendariz, a partner at Mexican firm Corral, Arzola, Armendariz & Maynez, said. "It's also just a matter of time before these governments come to realize that cannabis is a multibillion-dollar market. They'll be watching Mexico and Colombia."
Blueberries Medical Corp. (OTCQB: BBRRF) (CSE: BBM) is also listed on the Canadian Securities Exchange under the ticker (CSE: BBM). Earlier this week, the Company announced that it has, "received approval for the production, sale and export of five cannabidiol ("CBD") based health and wellness products from the Instituto Nacional de Vigilancia de Medicamentos y Alimentos ("INVIMA"), the Colombian National Food and Drug Surveillance Institute.
The approval has been granted for Blueberries' initial suite of Health and Wellness products which include a Face Cream, Lip Balm, Body Cream, Beauty Balm and Cannabis Oil Shampoo. Product launch in Colombia and Latin America is expected to commence in the second half of 2019 upon the completion of the Company's product branding strategy and distribution arrangements. As the Company grows its cosmeceutical line and brings products to market, Blueberries will leverage its strong product branding and marketing team, led by Christian Toro, Chairman of the Board, who brings over 40 years of experience in the development and marketing of consumer-packaged goods. The INVIMA approval is also expected to expedite the product approval process in other Latin America countries outside of Colombia.
'INVIMA approval is a major accomplishment which allows us to commence product commercialization. Our team of distinguished experts has diligently worked to create proprietary products to bring the benefits of CBD to consumers across diverse markets in Latin America and globally, and position Blueberries as a leader in this new market segment as it continues to evolve. Our wellness product line will offer a range of premium products with natural ingredients for both the female and male consumer,' stated Dr. Patricio Stocker, Chief Executive Officer of the Company.
'Commercialization is expected to commence in the second half of this year upon the completion of our product branding and distribution strategy. During this time, we will continue to expand our portfolio of registered products with a robust pipeline of new products under development and finalize distribution arrangements within Colombia and abroad,' stated Eduardo Molinari, Chief Marketing Officer of the Company.
CBD based cosmetic products have been an important focus area for Blueberries' technical and business development teams and the Company continues to focus research efforts towards the topical use of CBD to address the growing global skincare market which is expected to reach US$131 Billion in 2019 (Source: Euromonitor International).
The five INVIMA approved CBD based products will form the foundation of the Company's cosmeceutical and wellness offerings and include the following.
Face Cream: Specially designed for sensitive skin, the nutrient-rich formulation moisturizes the face and reduces the signs of aging providing sensations of wellness.
Lip Balm: Made with cannabis oil containing high concentrations of essential fatty acids, CBD lip balm helps to repair the skin's natural moisture barrier, leaving the skin soft and supple.
Body Cream: For use with dry and/or sensitive skin, this cream restores the natural moisture and elasticity of the skin for a younger, healthier look.
Beauty Balm: Multifunction, highly versatile cosmetic product that moisturizes and illuminates the skin, smoothing its tone, covering imperfections and protecting the skin from UV rays.
Cannabis Oil Shampoo: Moisturizing formulation leaves scalp strong and healthy, irrigating the capillaries for healthier, stronger and brighter hair while also helping to reduce premature hair loss.
CBD is widely regarded as an excellent cosmeceutical ingredient given its richness in nutrients such as Vitamin E, Omega 3 and Omega 6 as well as its many beneficial effects including the reduction of acne, dry skin and psoriasis. Its ease of absorption and ability to penetrate the skin helps to improve blood circulation and the lymphatic system functionality. The Company is currently in the final phase of R&D for two additional products which are expected to receive approval in the coming weeks.
About INVIMA: The Colombia National Food and Drug Surveillance Institute (Instituto Nacional de Vigilancia de Medicamentos y Alimentos or INVIMA) is a regulatory authority that was created in 1992 under the Ministry of Health. INVIMA is responsible for inspecting and supervising the manufacturing and marketing of health products, food and drugs as well as identifying and evaluating violations of health standards or procedures, implementing best practices and providing medical approval for the import and export of products.
As a level four World Health Organization (WHO) agency, product approval by INVIMA can expedite the product approval process for countries outside Colombia. INVIMA has the same level of WHO status as Canada and the United States.
About Blueberries Medical Corp: Blueberries is a Latin American licensed producer of naturally grown premium quality cannabis with its primary operations ideally located in the Bogotá Savannah of central Colombia and operations currently being established in Argentina. The Company is led by a specialized team with proprietary expertise in agriculture, genetics, extraction, medicine, pharmacology and marketing, Blueberries is fully licensed for the cultivation, production, domestic distribution, and international export of CBD and THC-based medical cannabis in Colombia. Blueberries' combination of leading scientific expertise, agricultural advantages and distribution arrangements has positioned the Company to become a leading international supplier of naturally grown, processed, and standardized medicinal-grade cannabis oil extracts and related products."
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Aurora Cannabis Inc. (NYSE: ACB) (TSX: ACB), headquartered in Edmonton, Alberta, Canada with funded capacity in excess of 500,000 kg per annum and sales and operations in 22 countries across five continents, is one of the world's largest and leading cannabis companies. Aurora Cannabis Inc. previously announced that, further to the Company's press release dated December 7, 2018, the Company had entered into a Letter of Intent to acquire all of the issued and outstanding shares of Farmacias Magistrales S.A., subject to customary due diligence provisions, the completion of definitive agreements, and regulatory and government approval. As previously announced, Farmacias recently became Mexico's first and only federally licensed importer to date of raw materials containing THC, gaining the necessary licenses, facilities, and permissions to import raw THC material, and manufacture, store, and distribute medical cannabis products containing over 1% THC. This transaction firmly establishes Aurora's first-mover advantage in one of the world's most populous countries, where more than 130 million people will have federally legal access to a range of Aurora's non-flower medical cannabis products containing THC. "This transaction positions Aurora with exclusive access to supply THC-containing medical cannabis to a large market of more than 130 million people, while also enabling us to capture the full margin of the medical cannabis we sell there," said Terry Booth, Chief Executive Officer of Aurora. "Farmacias has a large distribution network of both retail outlets and pharmacies, which will enable us to quickly scale up our operations across Mexico. Integrating Farmacias with our operations in Canada and Latin America will not only accelerate growth, it will build substantial long-term shareholder value."
PharmaCielo Ltd. (OTC: PHCEF) (TSX-V: PCLO) is a global company, headquartered in Canada, with a focus on ethical and sustainable processing and supplying of all natural, medicinal-grade cannabis oil extracts and related products to large channel distributors. PharmaCielo Ltd. recently announced its entry into the Mexican market through an equity joint venture with MINO Labs S.A. de C.V., a specialty pharmaceutical company and medical supply distributor based in Mexico, based on an agreement signed on January 25, 2019. The JV is called PharmaCielo S.A. de C.V. The announcement marks a key milestone in PharmaCielo's plan to become a leading global exporter of high-quality medicinal-grade cannabis oils and derivative products. Cannabis oil delivery under the JV to the Mexican market is expected to commence in Q4 2019, subject to the JV and PharmaCielo obtaining the requisite registrations and licences. PharmaCielo's ability to carry out the contemplated business under the JV will be subject to the approval of the TSX Venture Exchange. "We are thrilled about the opportunity to join forces with MINO. Ultimately, our plan is to bring our high-quality cannabis oils to Mexico," says David Attard, Chief Executive Officer of PharmaCielo. "Our premium quality oils are extracted from proprietary strains of dried flower at flower cost levels below USD 0.05 per gram. This enables us to focus our efforts and financial investment on the creation of the highest-quality oil-based health and wellness products, which when combined with the expertise of Mino Labs, will enable the JV to participate in the advancement of the medicinal cannabis industry in Mexico."
Khiron Life Sciences Corp. (OTCQB: KHRNF) (TSX-V: KHRN) is positioned to be the dominant integrated cannabis company in Latin America. Khiron Life Sciences Corp. recently reported that the Company's previously announced agreement for the acquisition of NettaGrowth International Inc., which at closing will own all of the outstanding shares of a Uruguayan company, Dormul S.A., is progressing as planned and the Company is in the latter stages of securing local regulatory approvals in Uruguay for the completion of the Acquisition. The Company has received conditional approval for the Acquisition from the TSX Venture Exchange Inc. NettaGrowth, through Dormul, is a Latin America export-focused cannabis company based in Uruguay, and is well positioned to serve Brazil and the growing Latin American market. They will employ the latest growing, extracting and processing technologies to produce high-quality medical cannabis products for the Latin American market. At this time, there has been no change to the status of the license applications of Dormul. The parties anticipate completing the Acquisition by the end of June 2019, subject to the satisfaction or waiver of all closing conditions and receipt of all regulatory approvals.
Sorrento Therapeutics, Inc. (NASDAQ: SRNE) is a clinical stage, antibody-centric, biopharmaceutical company developing new therapies to turn malignant cancers into manageable and possibly curable diseases. Sorrento Therapeutics, Inc. recently announced that it had established a new business unit to focus on the market potential for its innovative water-soluble cannabidiol (CBD) formulation technology. Cannabidiol (CBD) has been under consideration within the pharmaceutical side of Sorrento for its interesting pharmacological properties and potential clinical benefits in multiple central nervous system, autoimmune or inflammatory disease and pain related indications. Dr. Henry Ji, Chief Executive Officer and Chairman of Sorrento Therapeutics stated, "Without distracting from our pharmaceutical business, we have the ability to leverage another Sorrento innovative technology – this time from our formulation experts – and make it available to the broader consumer market… Longer-term, we may consider spinning off our CBD consumer business into an independently operated company if appropriate, while our research and clinical development team continues to explore the potential pharmaceutical applications of cannabidiol (CBD) for the medical markets."
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