Current situation of medical cannabis in Colombia from a business development perspective 3Q-2020

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There is current interest from private parties and governmental institutions in the business segment regarding medical cannabis cultivation and transformation into several products concerning an amplified concept of wellness.

Our company has been dialoging with different participants from the local industries where we find an atmosphere of hope together with clear desire to find new productive activities that arise at a time of low economy and unemployment due to the pandemic. This interest becomes intense not only at the local level of people and authorities but also of the international market.

Moreover, the oil business in Colombia in the last 5 years has shown great instability, being that our national main economic resource, the cultivation and transformation process of medicinal cannabis shines as an alternative for exploitation versus traditional resources such as coffee, cocoa, bananas, tropical fruits, among others.

This momentum of acceptance of medical cannabis in the world could be comparable to what happened 100 years ago with the illicit consumption of alcoholic beverages, which led the United States to legalize it and then came the impulse of companies to produce it. The same was replicated in Europe and the world and now they have seen that the use of non-psychoactive CBD with harmless effects makes it even more interesting.

The information that local consumer are receiving is accessible via national TV and visual advertising, radio interviews and written media in an abundant and consistent way, people are beginning to know that from a medicinal point of view, with the consumption of cannabis there is no taboo since an ethical and scientific base has been stablished.

We recently heard from analysts about a change in drug policy regarding recreational cannabis use in our country. At the institutional level, a constitutional reform is being filed in Congress, article 49 of the constitution to allow the consumption of cannabis only for adult use and in places established by law and primarily for medicinal use. (El Tiempo newspaper, August 11 2020, "what is the project that allows the consumption of marijuana") this represents a growing industry in countries like the United States and Canada where between 165 thousand and 235 thousand jobs have been generated in the USA while that in Canada illegal sales have been reduced by 30%, representing a value of US $ 2 trillion, which would be reflected in the authorized consumption of the product. There is a real political intention on the part of a large sector of the Colombian congress, which seeks development and a new approach to the fight against drugs. Citizens increasingly recognize the attributes of cannabis by listening to scientific reasons. The concept is increasingly demystified.

New factors are appearing every day to validate the feasibility of the local growing industry. Colombia benefits from having a variety of thermal floors and climates throughout its geography, ideal for the cultivation of the plant, we are in a tropical area of the earth with immense agricultural potential, where there are no climatic seasons and on the contrary a relatively stable climate with predictable production throughout the year. Currently the government is giving an important boost to licensing, although there was a traffic jam at the beginning of the current Duque government, now they are giving it greater dynamics. Last June, the government and the Minister of Justice announced the launch of the MICC digital platform, an information mechanism for cannabis control. Offering support to the work of the administrative and operational entities of control of cannabis for medical use.

This allows channeling the licensing process and procedures from filing to issuance of the document and subsequently monitoring and controlling the licensees. In addition, I highlight that in June of last year 238 licenses had been granted and by December 2019 the figure had risen to 632, to date the ministry had issued 742 and made 158 modifications to them, in addition to issuing 235 archival acts, Withdrawals and negotiations (Money magazine. June 1, 2020. Government opened platform to control the cannabis process). In May 2020, the first commercial export of 100,000 cannabis seeds was authorized to Denver Colorado USA and a month later another export of 9 million seeds to the same destination was authorized by the ministry. In another action, it was highlighted that the ministry is making progress in modifying decree 613 of 2017 in order to consolidate not only more efficient control and inspection mechanisms but also to achieve a better development of scientific research. And regarding the benefits for the industry, he indicated that those substances derived from Cannabis with less than 0.2% THC will not be controlled. Exceptional quotas will be created to accelerate the commercialization chain.

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The former VP of Microsoft, a Colombian member of the so-called Colombian commission of wise men, said: “It is the 2nd. Colombia's most crucial moment in its history, the first was its independence from Spain 200 years ago when New Granada was created and today the second is the technological and digital convergence with the country's biodiversity, it should not be wasted”. It seems exaggerated, but it is relevant, we must start with a potential promise of Colombia sitting in a paradise of producing added value through its biodiversity, a natural and cultural characteristic of our country, connected to the necessary productivity and sustainability.

This same character speaks of the concept of focusing on an Agricultural Bioeconomy. The bio-industrialization of the country is recommended. We must not only be extractive but give renewable value. We are facing a great bet in Bioeconomy. Technification and precision agriculture, intelligent agriculture, high productivity is all concept that are giving land a new perspective of exploitation towards biomass and biofuels rather than merely extraction. The world's hope in the face of climate change leads us to these challenges: replacement of single use plastics, new materials, active ingredients, food and medicines, biorefinery, green chemistry, added value with digital entrepreneurship. It is possible to create a Colombian country that is an exporter of knowledge and new products that the world needs.

On the other hand, Biomandarino has been making important achievements. Since its creation, the exhaustive search of the land, clarification of its legal and property conditions, in a country of wide rurality and peasant tradition, tours in Andean areas that meet certain parameters. In the end, and despite of the pandemic and isolation, we were able to acquire the property in Cundinamarca area and today it is a reality, there are more than 5 hectares of extension with an availability of 3 hectares for immediate cultivation; we have an ideal average climate from 1500 meters over sea level altitude with ideal soil and water suitable for growing medicinal cannabis.

Along this same route, we will have the transformation plant of the project as complement to this significant chance, we are in the hiring process to obtain a location at an industrial park into Cundinamarca municipality with excellent communication channels and services and near the cultivation land. The adaptation work is calculated to begin activities in February 2021. The Biomandarino´s licenses, for the cultivation of non-psychoactive and psychoactive medicinal cannabis and later transformation of the flowers, are in the process, we have established a teamwork to develop the plans and protocols required by the regulatory authorities, not only within the company, but also with seed suppliers that have already obtained their license for the cultivation of cannabis seeds, we have arranged collaboration contracts with very important allies to ensure the achievement of these key permits in the project.

Our strategies and innovation are inspired by this great opportunity, we must make the most of this moment where the execution of the Biomandarino project is in clear acceleration and is moving towards the fulfillment of challenging and achievable goals.

Biomandarino Special Projects Manager. August 2020 Data in file