LEADING FROM THE FRONT

Mexico 2019 | HEALTH & EDUCATION | INTERVIEW

For Khiron, Mexico will play an important role for its mission of developing a medical cannabis market in Latam that is bigger than Canada and Europe combined.

Álvaro Torres
BIOGRAPHY
Álvaro Torres has over 15 years of wide-ranging experience in the Latin American market. Torres was previously head of business development for SNC-Lavalin, Colombia, and was instrumental in growing the company from two people to more than 2,000 people over the course of three years. He has overseen the development of projects totaling over USD1 billion, including the development and construction of Colombia’s tallest skyscraper. He holds a bachelor’s degree in engineering, a master’s degree in engineering from Rensselaer Polytechnic Institute, and an MBA from Georgetown University.

What is your early reading of the new administration's views regarding medical cannabis?

The government is looking at the issue with a more progressive view. It is looking at the benefits of medical cannabis as well as the social benefits of legalizing most other cannabis uses, including recreational use, supplement use, cosmetics, and so on. The positivity around Mexico is tremendous, because the government has stated its full support of cannabis. Now, it is about understanding strategies and how to position each company within the market niches. It has been positive for everyone, and we are already looking at strategizing how we can lead the market forward.

How does Mexico's position in the United States-Mexico-Canada Agreement (USMCA) affect your long-term vision for Khiron's potential in the country?

In the next 10 years, we will see interesting developments. Eventually, the US will legalize cannabis; Canada and Mexico are also taking similar steps. It is hard to fathom no commercial synergies between the economies of Mexico, Canada, and the US. When this happens, being a Canadian company with Mexican operations will be a tremendous advantage for Khiron Life Sciences. On the other hand, we have to look at the reality in the coming years. Cross-border cannabis trade will be tougher, as each country is developing its own industry. Right now, the last thing the Canadian industry wants is to have a flood of Mexican cannabis entering the country, because it has invested billions of dollars in developing its own infrastructure. We are also particularly well positioned to take advantage of this, because we are a Canadian firm with Mexican operations. In the meantime, we have to think about and develop a country-by-country strategy. The opportunities for export will depend on the different regulations developed in different countries. It may well be that products like cosmetics can be shipped across borders, where the regulatory requirements for tetrahydrocannabinol (THC) products are more complex. However, my goal is to expand our presence and take advantage of the great potential in Mexico. Canada has a population of 35 million, while Mexico is more than 130 million. For companies such as ours, we are trying to keep an eye on the ball and focus on Mexico.

What role does Khiron's office in Mexico play in the company's R&D processes?

There are three distinct periods: five years down the road, two years down the road, and today. Today, we have a two-year advantage on understanding how to maximize cultivation. This year, we will start to produce medical cannabis that we can use for trials. Today, Colombia has this two-year advantage. In two years, as these products are exported to Mexico, and the regulation allows for cultivation, we will start to develop trials with products that originate in Colombia. In five years, there will be multi-national research opportunities. Our strategy is based on the synergies between Chile, Brazil, Mexico, and Colombia; each country has its own R&D, though eventually they will all be connected so we can develop the best products in the most efficient way. In Colombia, we already have our own clinics with our own patients, and we can advance research much faster compared to other places. Eventually, we will do the same in Mexico. The speed with which the Mexican government is developing changes in the cannabis industry will help the country easily catch up to Colombia within five years.

What is your outlook for 2019 regarding advancement in the industry and your strategic goals for Mexico?

In Mexico, Khiron will be able to position itself with products in the cosmetics, supplements, and non-THC medical products area. We will also work on building a stronger presence in Mexico, because it is four to five times larger than Colombia. This depends, however, on the speed the government is able to issue regulations. I am extremely optimistic, though these things can take time. Regulation takes time, which is why we are focused on CBD products at the moment. In 2020, when the government is clearer about what it wants from the THC space, then we will see this market opening up.