June 27, 2019

Khiron Life Sciences Corp (CVE:KHRN) Regulatory VP on Expanding CBD Cosmeceuticals Globally

Midas Letter
Midas Letter
Khiron Life Sciences Corp (CVE:KHRN) Regulatory VP on Expanding CBD Cosmeceuticals Globally

Khiron Life Sciences Corp (CVE:KHRN) (OTCMKTS:KHRNF) (FRA:4KH) Regulatory Vice President joins James to discuss cannabis regulations in Colombia. Juan Diego explains that as of now, marijuana laws in Colombia are predominantly focused on the plants medicinal use but CBD is legal to use in cosmeceutical products, of which Khiron’s Wellness business unit Kuida is focused. Kuida is the first brand in Colombia that brings the benefits of CBD to cosmeceutical and nutraceutical products, offering the full benefits of cannabis to consumers across Latin America.



Notice for Forward-Looking Information

Certain statements in this press release are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Such forward-looking information includes that Khiron Life Sciences Corp will be a big, successful company in the cannabis sector; that cannabis use and sales will grow and KHIRON’s sales along with it; KHIRON’s intended acquisition of various foreign companies and expansion into the European and South and North American markets; that cosmeceuticals is and will continue to be a fast growing and profitable sector of the cannabis industry; and that it will be able to carry out its business plans.


Readers are cautioned to not place undue reliance on forward-looking information. Forward looking information is subject to a number of risks and uncertainties that may cause actual results or events to differ materially from those contemplated in the forward-looking information, and even if such actual results or events are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on KHIRON. Such risks and uncertainties include, among other things: that a regulatory approval that may be required for the intended acquisitions and subsequent sales are not obtained or are obtained subject to conditions that are not anticipated; growing competition for intended acquisitions in the cannabis industry; potential future competition in the markets KHIRON operates for sales; competitors may quickly enter the industry; general economic conditions in the US, Canada and globally; the inability to secure financing necessary to carry out its business plans; competition for, among other things, capital and skilled personnel; the possibility that government policies or laws may not permit legal cannabis sales or growth or that favorable laws in place may change; KHIRON not adequately protecting its intellectual property; interruption or failure of information technology systems; the cannabis market may not grow as expected; KHIRON’s technology may not achieve the expected results and its accomplishments may be limited; even if it is granted patents, it may not have success at licensing its technologies or sell its products at the rate expected; planned acquisitions and partnerships may not materialize because of inability to agree on terms with prospective partners or targets; KHIRON’s business plan also carries risk, including its ability to comply with all applicable governmental regulations in a highly regulated business; incubator risk investing in target companies or projects which have limited or no operating history and are engaged in activities currently considered illegal under US federal and foreign laws; and other regulatory risks relating to KHIRON’s business, financings and strategic acquisitions, including securities laws, trade rules, and foreign country regulation that is not the same as Canadian or US regulations.



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James West: I’m joined now by Juan Diego Alvarez. He’s Khiron Life Science’s Regulatory Vice President. Juan Diego, welcome!

Juan Diego: Thank you so much. It’s great to be here and be able to speak about regulatory issues with you.

[stock_chart symbol=”KHRN:TSV” align=”left” range=”1Y”]

James West: Sure. Okay, Juan, let’s start with a discussion about the rules in Colombia are – it’s hard for us in Canada and the United States and Europe to understand exactly what is the status of the regulations in Colombia right now as it pertains to both medical as well as recreational cannabis.

Juan Diego: Well, the regulation in Colombia is concentrated only on the medical side, so what has happened is a development in the last three years, basically, in which the government enacted a law, then a decree and some resolutions in which the whole chain of production of medical cannabis until the final product was completely regulated in the country. 

However, I will also mention that what the government did was also to create what is called non-psychoactive cannabis, and it’s everything that is in certain way a pure CBD. And in that sense, that is not a subject of control, and therefore we can manufacture and have different type of products that are not, that have no psychoactive effect.

That’s why, for example, Khiron has a wellness line of products that is called Kuida, because many cosmeceutical products that we are commercializing in the country for the last six to seven months.

James West: Okay, so CBD, then, is legal for sale at the retail level right now in stores in Colombia?

Juan Diego: It’s legal in cosmetic products. We’re still waiting for the final regulation for nutritional supplements and food and beverages; those category of products require additional regulation, which is our sanitary agency, but for cosmetics, CBD it’s an ingredient already permitted in the country.

James West: Okay. So the Kuida products are currently for sale in Colombia everywhere, with CBD as the active ingredient or one of the active ingredients?

Juan Diego: Exactly. It’s one of the active ingredients. We have developed a technology called CBDerm for these products, and we are commercializing the products in different chains of distribution and different retail stores.

James West: Sure. Okay, now tell me about the ability to export Kuida products to the rest of Latin America. What is the condition of the rules in each of the countries that you would export Kuida products to?

Juan Diego: Well, that’s a complex question, I will say, because as you know, exporting depends from the market in which you are manufacturing and producing the product and the market in which you intend to import the product. So what we have been developing for the last months is, we have a regulatory team in each of the countries in the region. We have our regulatory person in Mexico, in Peru, in Uruguay, in Brazil and Chile, and we are working with them in the specific permits that we will require to be able to commercialize those products.

It depends in each country. I would say, for example, that in Peru for example, we have super national regulation, because we have a free trade zone between Peru, Ecuador and Colombia, and therefore we need to amalgamate the registries or the permits that we have in Colombia. That is a quite simple process, I would say, and not as complex handling all the regulations.

In Chile, for example, we will need to adjust some of the formulations and the ingredients, because in Chile you require previous review of the products before commercialization. So we are in that process, and that’s kind of the case. It’s a case by case basis, but we hope that for next year we will have the Kuida products in the region.

James West: Sure. How about Mexico, which is a pretty substantial market. What’s the situation there?

Juan Diego: Mexico, it’s an interesting market because they passed a law around a year and a half ago in which they created or authorized the medical use of cannabis and gave Cofepris, which is the sanitary agency, the capacity to recategorize or define what was not psychoactive, and therefore was not a controlled substance. And in that sense, they created the medical market and what we can call also the CBD market.

Cofepris enacted some guidelines in November of last year, but the new government revoked these guidelines in February. So right now what we have in Mexico is a new government that is defining a new regulatory framework, new guidance and new resolution that will define the commercialization of these products, but what is so clear is that we have a legal framework that already created the possibility of developing medical products and, at the same time, CBD products with no restriction of use.

James West: All right. That sounds good. Now, Europe is also opening up as a market for Khiron, and I’m curious as to what is the situation with regulations in terms of exporting, say, Kuida products to, say Germany and the rest of Europe.

Juan Diego: Well, the situation in Europe is interesting because they have two different markets for cannabis and hemp. That’s kind of the first topic that I will remark. Hemp is defined or, better to explain, in the European Parliament defined like a catalogue that can be defined as hemp. So you can not only cultivate as hemp the strains that are in this catalogue, and those strains in that catalogue are strains with less than 0.2 percent of THC.

If those strains have less than 0.2 percent of THC are categorized or defined as hemp, and you can develop different types of products. So, I’m going to give you some examples. In UK, you don’t need the regular authorizations to commercialize products as long as you can demonstrate that they come from these hemp strains.

In Italy, you can commercialize these products, as long as you demonstrate that they come from the catalogue and you notify the government about the use of those strains in these specific products.

So you have like a general framework that defines what is hemp and what are the products that you can develop with those strains, but that also needs contributable need to fulfill certain requirements to be able to enter into the market with the cosmetics products that, for example, we are developing with Kuida.

James West: Interesting. So it’s all moving forward; do you see any countries that are sort of lagging behind in terms of keeping up with the sort of rollout of regulations around the world, that you kind of feel could be doing better?

Juan Diego: Well, I would say that Latin America is moving fast, but we have cases, for example, like Brazil or Argentina in which they are allowing the importation of medical products through a category, a specific category, that can be defined as compassionate use. But you could have a more robust legal framework to be able to commercialize those products in those two countries, for example.

So I think that the ball is moving; each country is advancing at different speed. I will remark, for example, Peru is doing a great job in the definition of their regulatory framework. They passed the final decree defining the conditions to commercialize medical cannabis in February. This is a big market, it’s a 32 million people market, and we have also Chile, which is a market that doesn’t have a complete regulatory framework but have the different categories that you can use to be able to commercialize medical cannabis.

So yeah, each country is advancing at a different speed, but at the same time, it’s clear the tendency and the trend, that each country is, every time, authorizing more products or defining a regulatory path that is easier to navigate.

James West: Where do you think that the biggest competitive sort of pressure will come from in terms of fulfilling sales and products in Latin America, Europe, etcetera?

Juan Diego: Well, I think that Colombia has established as probably the better country in terms of the regulatory framework. Colombia, I think that the different companies that has been established in the country are taking advantage of very favourable regulatory framework. It’s a very specific regulatory framework; you need to navigate a lot of permits and conditions, but I think that this is what is going to guarantee a great product in terms of quality and control in the medium term.

So I will say that the countries that regulate this faster and with more detail, are the ones that are going to establish in the global market.

James West: Okay. Juan Diego, that’s a great initial conversation with you; I’ll look forward to talking with you more in the future. Thanks very much for joining me today.

Juan Diego: No, thank you so much for the opportunity, and I think that it’s exciting times for the regulatory environment. Everything is changing very fast, so we are up to date all the time.

James West: Fantastic. I’ll look forward to talking to you again. Thank you.

Juan Diego: Thank you so much.

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