MJBizDaily Investor Intelligence

MJBiz Daily | Investor Intelligence mjbizdaily.com/investing Copyright 2019, Marijuana Business Daily, a division of Anne Holland Ventures Inc. You may NOT copy this report, or make public the data and facts contained herein, in part or in whole. For more copies or editorial permissions, contact CustomerService@MJBizDaily.com or call 720.213.5992 x1. 7 Other top international markets and developments investors will want to watch in 2019: COLOMBIA Colombia drew most of the attention in Latin America in 2018, as the country was flooded with foreign investment commitments from North America. Many of the large Canadian publicly listed licensed producers acquired assets in Colombia, including Canopy Growth, MedReleaf, Cronos and Aphria. Other investment highlights from 2018: In January, Northern Swan, a New York-based investment fund, invested in Clever Leaves, a vertically integrated Colombian licensed producer. In May, Khiron Life Sciences Corp. commenced trading on the TSX Venture Exchange, becoming the first Colombia-based cannabis company to list on any exchange globally. In August, Pharmacielo raised almost 40 million Canadian dollars ($30.1 million) ahead of its public listing. So far, exports from Colombia have not been possible, but the first ship- ments are expected to begin in mid-February, albeit solely for analytical and testing purposes at this point. If commercial exports are allowed, it could potentially disrupt the industry worldwide because of the lower costs of production in Colombia. Companies that started the registration of their genetics before the end of 2018 will have a significant advantage over newcomers in production in Colombia — and therefore could be among the most attractive investment opportunities. The Colombian government ended its genetics “amnesty” regulation at the end of 2018, and therefore newcomers will need to either import genetics or buy from already existing LPs. URUGUAY Like Colombia, Uruguay could see the first exports of medical cannabis in 2019 as the country expands its production of recreational, medical and industrial products. The country was the first country to legalize cannabis in all forms at the federal level in 2013, but the market was relatively stagnant until mid-2018. In December 2018, a new application process for recreational cannabis culti- vation was announced, which will allow for up to seven licensed producers in the country – up from two. Lower labor, land-acquisition and production costs have made operators in Uruguay an acquisition target by other international players. For example, Canada’s Aurora acquired ICC Labs, one of two existing licensed producers that grow recreational cannabis in the country. Today, 17 companies have been licensed in some form and roughly 20 more have projects under government analysis – opening up major opportunities for foreign direct investments into the sector. If all the projects are approved, industry investment could total $80 million, according to the country’s Institute for the Regulation and Control of Cannabis. GERMANY Germany remains on track to become one of the world’s largest medical marijuana markets, with the number of insured patients continuing to climb and MMJ imports steadily increasing to meet demand. Germany’s medical marijuana program is within reach of 70 million res- idents under the country’s statutory health insurance system, meaning pa- tients are free to shop around for a plan that suits their needs, some of which include MMJ coverage. Total cannabis sales covered by health insurance surpassed 50 million euros ($56.8 million) in the first nine months of 2018, the most recent data available. That demand continues to be met entirely through imports, even as Germany attempts to launch domestic cultivation by April. Early exporters into Germany, including Canadian cannabis giants Canopy Growth, Aurora and Aphria, continue to have a competitive advantage as each have operations under way in the European country. These early plays make them an attractive investment consideration for those looking to fold interna- tional markets into their portfolio. ASIA, AFRICA AND OCEANIA Asia, South Korea and Thailand surprised the world in 2018 by legalizing medical cannabis. Many details about how these programs will work are still in development, but much of the attention and foreign investment commitments that Latin America received in 2018 could shift to Africa and Asia in 2019. In Oceania, 2018 was the year in which Australia saw a drastic increase in the number of medical marijuana patients and companies started preparing to become exporters. New Zealand legalized medical cannabis and regulat- ed hempseed as food, moves that will open new investment considerations within the country. This year, investors considering opportunities in these international markets will want to closely monitor developments critical to the success of operators in the regions, including: Whether Africa can prove to the world that production and commercial exports of medical cannabis from the continent are possible. How countries in Asia regulate their MMJ programs and if others in the region pass legislation, which will have a significant impact on investment opportunities that might emerge. The development of the local markets in Australia and New Zealand and if operators in those regions will be able to execute plans to begin exporting. What to Watch: International Cannabis Markets in 2019 (continued)