EXMceuticals CEO Jonathan Summers on the medical cannabis market

Absolutely, and thanks for taking the time to speak with me today. First of all, I would like to pay tribute to Michel, who has led the Company through a crucial period in 2019, both before and following the RTO listing in Canada. Tangible progress has been made under his leadership.

As you know, we have recently been awarded our key R&D license in Portugal. Given this development and Michel’s extensive agricultural expertise as an agro-industrial engineer, he will refocus his efforts through his role as Chairman of EXMceuticals Farming. In doing so, he will ensure that all our African cultivation and extraction operations continue to be run and expanded effectively. Consequently, the board asked me to perform the role of CEO initially on an interim basis.

There are several reasons as to why we’re growing in Africa and it is really key to understanding half of the value proposition that EXM offers. In being able to grow in some of the best natural conditions in the world along the equator, Africa offers enormous advantages for cannabis cultivation. Consequently, our scalability in our cultivation will be one that cannot be achieved in many other locations. It really is important to stress the advantages of growing in the tropics, where there is an abundance of sun, rain and fertile soil with an average of 12 hours of daylight.

In turn, we are able to grow outside in open air, not having the need to build or heat expensive greenhouse facilities. Aside from short periods of heavy rain, we are growing all year round. Moreover, given that these temperatures foster quicker cultivation speeds, we will be producing three to four harvests per year.

This ultimately brings us to the commercial crux of cultivating in Africa: with more plants reaching maturity quicker, production volumes will be higher from the same investment spend. Our cost of production should be substantially lower than what other countries can achieve, with volumes being very meaningful once we have fully scaled.

We were really proud of this development when it came through. It is the result of a competitive, 18-month process with stringent due diligence. Simply, Portugal will now become the hub of EXM’s. This initial R&D license granted for cannabis, obtained from the Portuguese Medicines Agency (INFARMED), enables EXM too import raw material into Portugal and refine it inside the existing R&D facility and pilot refinery.

As such, EXM is now actively pushing forward with an initial cannabis importation for the R&D lab. More importantly we are also now commencing the fitting out and equipping and licensing of a much larger, sizeable industrial facility that EXM has leased to the south of Lisbon. Once licensed and constructed, commercial facility will require a substantial amount of raw and processed cannabis material to be available for refining. This will subsequently provide us with the opportunity, as you say, to sell CBD-based cannabis products throughout the European Union and beyond.

In tandem with this exciting scalability is the research element. In partnering with some leading European universities and globally recognized R&D experts, we are underway with formulating new refining techniques and products and, therefore, IP. As such, we will be able to widen and develop the type of products that will be sold.

EXM is an ingredients business, and we will supply extremely pure compounds to buyers on a wholesale basis. Given the diverse nature of this sector, the sensitivity surrounding various compounds within a cannabis plant, as well as the evolving legal framework it is clearly important, we know where our ingredients are being used. EXM is a nutraceutical and medicinal cannabis company focused on cultivation, extraction and refinement. EXM is, therefore, in no way involved with recreational cannabis activities or products, and nor does it want to be.

I really do believe that EXM offers a unique value in the cannabis sector. Our Portuguese angle is something which demonstrates this. Specifically, EXM now has a fantastic opportunity to construct an EU-GMP certified cannabis ingredients factory in Portugal. Combined with our outdoor cultivation operations, this will create a sizable high quality and low-cost supply chain for customers looking for cannabis ingredients. It is this supply chain, bestriding both the European and African markets, which can bring real value for EXM’s shareholders and clients.

Whilst there is potential to become an incredibly lucrative business, EXM is still committed to having a long-lasting impact through the countries in which we operate. This is something that can also set us apart from other competitors in the sector. Whenever possible, we will continue to buy local and hire local. Hundreds of jobs are and will continue to be created locally at each stage of our operations. Furthermore, we will also add significantly to the skill-sets of the local labor force, collectively sustaining the environment for further economic growth.

Finally, on the philanthropic and sustainable angle, we are passionate about creating a foundation that receives 2% of the gross revenues from the local production facilities. These foundations will each have an independent board to manage the process of funding significant local projects that will help to address specific needs of the local community.

We’re really proud of the work we’ve done thus far in 2019 – it’s been a busy year, to say the least! Undoubtedly the biggest highlight of this past year has been the obtention of the Portuguese R&D license in October. Not only is EXM now entitled to conduct cannabis R&D activities in Portugal, but we have also conducted our first cannabis harvest in Uganda, as well as pushed forward a number of other cultivation license applications in Africa.

These milestones have simply reinforced the value chain that is and continues to be developed between Portugal and Africa. However, there is still much work to be done and that’s why we’re really focusing on our Portuguese operations to complete EXM’s supply chain. This is all about getting into meaningful production in the near future, and then we can see what happens!