Mexico could be one of the top cannabis players in the world. Months after the lower house of Congress decriminalized cannabis for recreational and medical use, final approval has been held up in the Mexican Senate. However, “Mexico is clearly legalizing. It’s going to happen, probably in 2022,” said Xebra Brands (CSE:XBRA)(OTCQB:XBRAF) Chairman Robert Giustra, as quoted by Reuters. In addition, Reuters added, “An official from MORENA, President Andres Manuel Lopez Obrador’s ruling party, told Reuters that despite obstacles, approval of the measure in the Senate was expected in 2022. That could make Mexico the world’s largest single weed market.” Aside from Xebra Brands, that’s bullish news for Aurora Cannabis (NASDAQ:ACB) (TSX:ACB), Canopy Growth (TSX:WEED)(NASDAQ:CGC), Tilray Inc. (NASDAQ:TLRY)(TSX:TLRY), and OrganiGram Holdings (NASDAQ:OGI)(TSX:OGI).
Xebra Satisfies All Conditions to Own 100% of Mexican Subsidiary
Xebra Brands Ltd., a cannabis company, announces that it has fully satisfied the terms of the 100% acquisition of Desart MX, SA de CV, via the issuance of 48 million common shares of Xebra. The shares were issued to five Mexican vendors and are being placed in escrow with staged releases over 38 months (3 years and 2 months).
Desart has been granted an injunction by the Mexican Supreme Court, that has positioned it with an outright first-mover-advantage in the Mexican CBD and CBG market. Official licenses will be granted by the Mexican Health Regulatory Agency (COFEPRIS) in due-course. The Supreme Court decision is irrevocable and cannot be appealed.
Xebra is moving quickly to take advantage of its absolute first mover advantage. Discussions are underway to secure up to 300 hectares of suitable land for cultivation, and multiple Canadian and American companies with cannabis processing and extraction expertise have expressed an interest in partnering in Mexico. Manufacturing joint-venture opportunities with established Mexican parties have been identified, and distribution channels are being explored.
Xebra injunction applies specifically to the industrial cannabis sector, and explicitly to cannabis with low-levels of THC (under 1%), therefore, in practical terms, to hemp cultivation and processing, and to the manufacture and sale of mainly CBD and CBG products, such as tinctures, oils, topicals, edibles, beverages, concentrates, distillates, emulsions, and biomass etc., and certain uses of the cannabis flower.
Xebra believes Mexico has the potential to be one of the largest near-term country cannabis consumer markets in the world. Mexico is also within the North American free trade zone (USMCA), giving it considerable cultivation and product manufacturing cost advantages over Canada and the United States. Xebra is of the opinion that there is sufficient precedent with many agricultural crops and manufactured products, to suggest that there is a possibility that ultimately the majority of North American industrial scale cannabis production activity will occur in Mexico.
Other related developments from around the markets include:
Aurora Cannabis announced the delivery of a cannabis shipment worth approximately C$10 million – the company’s largest ever shipment to Israel, and what is believed to be the largest export of medical Cannabis into the Israeli market. Delivered in December, the shipment will be recognized as revenue in Aurora’s FY22 Q2 period. The sale builds on the Company’s growing presence in Israel, a key market as Aurora continues to strengthen its international medical business. As the leading Canadian licensed producer (LP) in global medical cannabis by revenue, Aurora has strategically focused on international expansion to bolster its diversified business portfolio. The Company also recently entered into a joint venture in The Netherlands to participate in the Controlled Cannabis Supply Chain Experiment, an adult-use pilot program.
Canopy Growth has entered into an agreement to divest its subsidiary business, C³ Cannabinoid Compound Company GmbH, to Dermapharm Holding SE, a European pharmaceutical company headquartered in Grünwald, Germany. The C³ business develops and manufactures pharmaceutical products and is comprised of Spectrum Therapeutics GmbH, based in Neumarkt-in-der-Oberpfalz, Germany, THC Pharm GmbH The Health Concept, based in Frankfurt, Germany, and Spectrum Therapeutics Austria GmbH, based in Vienna, Austria.
Tilray Inc., a leading global cannabis-lifestyle and consumer packaged goods company inspiring and empowering the worldwide community to live their very best life, reported financial results for the second fiscal quarter ended November 30, 2021. All financial information in this press release is reported in U.S. dollars, unless otherwise indicated. The Company also announced a new parent name, Tilray Brands, Inc., reflecting the Company’s evolution from a Canadian LP to a global consumer packaged goods company powerhouse with a market leading portfolio of cannabis and lifestyle CPG brands. Irwin D. Simon, Tilray’s Chairman and Chief Executive Officer, stated, “Our second quarter performance reflects notable success building high-quality and highly sought-after cannabis and lifestyle CPG brands which, coupled with our scale, operational excellence and broad global distribution, enabled us to increase sales and maintain profitability despite sector-specific and macro-economic headwinds.”
OrganiGram Holdings, a leading licensed producer of cannabis, announced its results for the first quarter ended November 30, 2021. “Our record-breaking results in the first quarter of Fiscal 2022 are a testament to our successful strategy to create innovative, high-quality products that align with the evolving preferences of the various segments of cannabis consumers,” said Beena Goldenberg. “Our positive outlook for 2022 is further bolstered by the addition of Laurentian’s premium products to our portfolio, with an increased presence in Quebec and the resumption of international sales, which will continue through the year.”
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