Xebra Progressing Quickly with CBD and CBG in Mexico, with its First Mover Advantage Granted by the Supreme Court

Xebra Brands Ltd. a cannabis company, provides and update on its Mexican activities.

Xebra’s wholly owned Mexican subsidiary, Desart MX, SA de CV (“Xebra Mexico”), 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.  Mexico is on a path to full cannabis legalization, likely in 2022, however Xebra’s injunction does not depend on legalization.  In fact, the longer Mexico takes to legalize then the longer Xebra’s first mover advantage will be.  Once a legal framework is adopted by Congress in Mexico, it could be up to three years before any entity (besides Xebra), can commence any commercial cannabis activities, due to the long approval process that applicants will be subject to; this lengthy process was the case in Canada, Colombia and elsewhere, and is very likely to be the case in Mexico as well.  The Mexican Senate and the Chamber of Deputies are expected to continue debating a proposed cannabis bill in February 2022; however, it seems that the debate could be protracted.

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 Mexico’s 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.

More information will be provided on Xebra’s Mexican plans in due-course.

ON BEHALF OF THE BOARD:

Rodrigo Gallardo
President

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