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TORONTO, CANADA and MEXICO CITY, MEXICO (January 28, 2019) – PharmaCielo Ltd. (TSXV:PCLO), the Canadian parent of Colombia’s premier cultivator and producer of medicinal-grade cannabis oil, PharmaCielo Colombia Holdings S.A.S., announced today its entry into the Mexican market through an equity joint venture with MINO Labs S.A. de C.V., a specialty pharmaceutical company and medical supply distributor based in Mexico, based on an agreement signed on January 25, 2019. The JV is called PharmaCielo S.A. de C.V.
The announcement marks a key milestone in PharmaCielo’s plan to become a leading global exporter of high-quality medicinal-grade cannabis oils and derivative products. Cannabis oil delivery under the JV to the Mexican market is expected to commence in Q4 2019, subject to the JV and PharmaCielo obtaining the requisite registrations and licences. PharmaCielo’s ability to carry out the contemplated business under the JV will be subject to the approval of the TSX Venture Exchange.
“We are thrilled about the opportunity to join forces with MINO. Ultimately, our plan is to bring our high-quality cannabis oils to Mexico,” says David Attard, Chief Executive Officer of PharmaCielo. “Our premium quality oils are extracted from proprietary strains of dried flower at flower cost levels below $0.05 per gram. This enables us to focus our efforts and financial investment on the creation of the highest-quality oil-based health and wellness products, which when combined with the expertise of Mino Labs, will enable the JV to participate in the advancement of the medicinal cannabis industry in Mexico.”
PharmaCielo Mexico is owned equally by PharmaCielo and MINO Labs. The board of directors of PharmaCielo Mexico is to be comprised of three directors nominated by PharmaCielo and three directors nominated by MINO Labs. PharmaCielo and MINO Labs are required to develop in good faith a business plan within 90 days and submit it to the JV Board for approval. The business of the JV is intended to include the sales, distribution, marketing, research, and product development of medicinal cannabis products in Mexico. The JV must prepare and submit all necessary regulatory applications and registrations required to conduct the contemplated business of the JV in Mexico. Within 90 days, the JV and PharmaCielo are to negotiate and enter into a long term supply agreement pursuant to which the JV would exclusively purchase from PharmaCielo cannabis oils and other cannabis products to be used for developing, manufacturing, marketing, and selling. Also within 90 days, the JV and PharmaCielo are to enter into a co-branding license agreement that would govern the use of PharmaCielo trademarks used by the JV. PharmaCielo and Mino Labs have also entered into a non-competition agreement not to compete with the JV in Mexico.
MINO Labs has more than 20 years of experience in the pharmaceutical and medical distribution sector with dedicated and experienced sales staff. With access to distribution, warehousing and commercialization facilities throughout the Mexican territory, MINO supplies large retail chains, independent and retail drugstores alike, as well as government-owned outlets with pharmaceutical, biological and additional revenue-generating over-the-counter (OTC) products. MINO has access through a sister company to an independent and fully licensed state-of-the-art warehouse with 64,500 feet located in San Antonio La Isla, State of Mexico. This facility complies with the mandatory infrastructure regulations and is licensed for pharmaceutical products in the Mexican marketplace.
Manuel Cosme Odabachian, CEO of MINO says, “We are proud to partner with PharmaCielo in order to attempt to bring unique, cannabinoid-based wellness products to the Mexican market. Our experienced sales team has experienced an accelerating demand from both pharmacies and doctors across the country for medicinal-grade cannabis products, and with this partnership, we believe we are well positioned to meet that demand with top-quality cannabis oil health and wellness products prepared based on the specific formulation needs of the market.”
PharmaCielo’s CEO, David Attard, added, “Today’s announcement also satisfies our ultimate objective to identify a strategic path to make a positive economic impact on any country we choose to enter. Ultimately, the opportunity with Mexico should combine the value of equatorial Colombian cultivation with the local expertise to create market-specific formulations and products, building and staffing second-stage operational facilities with the advanced expertise required, all without cannibalizing the value that Colombia brings to the table.”