Khiron Life Sciences started in Colombia, though it has ambitious plans for the rest of Latin America as well. What role does Mexico play in your regional expansion plans?
Mexico represents a significant market for Khiron. With a population of approximately 123.5 million people and access to nearly 11.7 million patients for medical cannabis, we see an attractive opportunity to transfer the wealth of knowledge we have created into this new market. Mexico will play an important near-term role in helping us achieve our business objectives, and ultimately it is our intent to be the leading medical cannabis product brand across the entire Latin American region and a major global exporter of medical cannabis products.
For Khiron's needs, how does Mexico's regulatory environment compare to other Latin American markets that you are also interested in?
Although slightly more limiting—for example, Mexico currently only permits the import of medical cannabis products that contain less than 1% tetrahydrocannabinol (THC)—the regulatory structure for medical cannabis in Mexico is similar to that of Colombia, in that both countries have—we believe wisely—exclusively legalized cannabis extracts as a means to generate a market for legitimate medical products of the highest quality and consistency. While excluding recreational cannabis and the inherent societal challenges that go along with it, the medical cannabis regulations create an opportunity for innovative companies to develop master preparations, phytotherapeutic products, and “ethical drugs” that can be distributed to patients through well-regulated channels.
How would you assess the level of support for medical cannabis in the country, both from the general public and the government?
The Mexican government is taking a cautious and well-calculated approach to the legalization of medical cannabis in the country, as it clearly wants to avoid any missteps that could potentially exacerbate, rather than reduce, the well-known troubles Mexico—like Colombia and other LATAM nations at various times in recent history—has had with criminal organizations involved in the illegal drug trade. The Mexican government's efforts in this area are being driven by a deep and genuine belief that the potential social, health, and economic benefits of legalized medical cannabis could have a major positive impact for the whole country. The Mexican people predominantly hold conservative social views that could conceivably impede the government's efforts to legalize cannabis in any way. However, despite the fact that the vast majority of Mexicans are opposed to the legalization of cannabis for recreational purposes, surveys show that more than 75% support the legalization of medical cannabis. We fully expect support for medical cannabis to grow even stronger in Mexico as more patients are successfully treated for a range of health problems and the body of evidence builds that medical cannabis is a safe, effective, and affordable option for many ailments.
What role, if any, do you see a robust medical cannabis industry in Mexico playing to combat against the country's issues with drug-related crime and violence?
Khiron is the first medical cannabis company in Latin America to implement US DEA standard pharmaceutical compliance protocols for security and safety. We have a scalable and comprehensive security plan that identifies and mitigates risks relating to Khiron's assets and covers the entire production, distribution, logistics, and operations chain. We are setting a standard that the entire medical cannabis industry can emulate. The long-term viability of the industry and all the social, health, and economic benefits it can bring to the nation—including reducing drug addiction and related crimes—are well worth the effort.
How would you assess the level of investment interest in the sector, both from within Mexico and from foreign investors?
The interest from global investors in the potential of the medical cannabis sector in Mexico and across Latin America is growing rapidly. Investors are obviously impressed with the scale of the market opportunity, along with a long list of significant and unique competitive advantages LATAM medical cannabis producers have over cannabis producers in almost any other part of the world.
What are Khiron's concrete plans through 2019 for the Mexican market?
We are looking to submit medical cannabis licence applications with the nation's regulators as soon as the country enacts the final regulations and actively plan to enter the market within the next 12-18 months. In the meantime, we continue to develop strong commercial relationships with numerous medical associations and potential distribution partners across Latin America—including Mexico—by providing the most up-to-date international medical information about the benefits and applications of medical cannabis. This is why we were one of the lead sponsors of the CannaMexicoWorld Summit, held in León in late May. It is our duty as an early-stage developer of medical cannabis products in Latin America to take a patient-oriented approach that includes working closely with healthcare professionals to offer patients safe, effective, and affordable alternatives to existing medications. From a product perspective, we have a portfolio of than 19 medical-grade cannabis strains with full genetic history and suitability assessments based on 10 years of observational clinical data across various indications. From that, we are developing a variety of specific formulations of THC and cannabidiol (CBD) compounds for patients that will be available both over-the-counter and by prescription, depending on the product and the regulatory definitions.