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COWEN
COLLABORATIVE INSIGHTS
February 25, 2019

Latin American Landscape

Chile

Medical cannabis has been legal in Chile since 2017 following a pilot program conducting scientific research that began in 2014. A consortium of non-for-profit organizations, most notably the Daya Foundation, ran this program. They treated over 1,000 patients in the first year of operations. Following the regulatory change in 2017, imported medical cannabis products were available from pharmacies.

Product authorization and cultivation licenses are required to grow and distribute medical cannabis products in country. The Agricultural and Livestock Service of Chile governs these licenses. Chile also permits home-grow, which is popular in the country and the region.

Dayacann (part of Daya Foundation) was the first company to receive a license to cultivate medical cannabis in Chile. Khiron Life Sciences entered an MOU with Dayacann in January 2019 to further expand into the Chilean market of around 1.8 million patients. In 2018, Tilray entered a partnership with Alef Biotechnology (now Tilray Latin America) for distribution in Chile and Brazil, and recently received a license to cultivate and process medical cannabis products. Two Tilray products, T100 and TC100 were approved for prescription in 2016. Canopy Growth's Spectrum Cannabis Chile is also operating in Santiago focused on medical research and patient outreach.

Hemp production has been part of Chile's history, dating back to the 1500s, and has remained legal. There have been provisions in Chilean law to differentiate between cannabis and hemp. Despite its legality, there are not many hemp farms in the country. Chile hosts Expoweed, a hemp trade show, that is Latin America's biggest hemp event. With the land and history, the country has positioned itself for growth as demand for hemp-based products increase.

Colombia

Colombia is becoming a Latin American hub for cannabis cultivation due to favorable climate and cost of production. The country permits exports of extracts only, with the exception of small quantities of dried flower that are exported for scientific reasons. Only permitting extracts for export is strategic to have traceability from seed to harvest and production. This is in order to curb organized crime and money laundering related to the country's history of drug trafficking. There have been trade agreements established between the EU and Canada in order to facilitate exportation of extracts.

The governments passed legislation for medical use in 2015, which was formally implemented in 2016, and a framework for medical cannabis cultivation was established in 2017. The country issues four types of licenses: 1. Cannabis Seeds (for scientific purposes) 2. Cultivation (psychoactive cannabis) 3. Manufacturing (cannabis derivatives) 4. Cultivation (non-psychoactive cannabis). Another license is required to export. Clever Leaves became the first Colombian company in February 2019 to export medical cannabis to Canada.

Many Canadian LPs have opened operations in Colombia, including Canopy, Aurora, Plena Global, Khiron Life Sciences, Blueberries Medical Corp, Pharmacielo and Wayland. Some of these companies are focused on cultivating strains for CBD. Pure Harvest Cannabis Producers recently entered a JV for land in Colombia to produce CBD from hemp and cannabis. Pharmacielo also secured a proprietary license to cultivate 10 strains, some CBD and some THC dominant. The company registered their seeds, which is now required following an amnesty period for seed genetics that ended December 31,

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