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Licensing Discussion with QBL: MCL

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    Personal Comment

    Good morning guys,

    Over the past few months, there has been a lot of discussion about the Licensing, types of Licenses, and why QBL seem to be taking so long obtaining their License approvals.

    I have spoken to Sholom recently about making this clear to the shareholders and market. I made it clear that there is confusion in the market and amongst shareholders. This is what I found out.

    Note: I have written this response which was checked and approved by QBL management.

    Some background for understanding

    Due to the rapid growth of the MCL business and its current advanced research and production partnerships with International Medical Cannabis companies / Institutions and world-leading research groups, who have their own fully approved licenses, QBL has had to investigate and consider whether there is any purpose served by pursuing medical research, medical cultivation and medical production licenses in Australia or would it be better served to operate with their international partners, using the International licensing facilities already approved. The Licenses these companies currently hold are significantly far more reaching than any local Australian license could currently achieve.

    The general question is, to what commercial end does any local company have a medical cannabis cultivation or research license? If it is for medical research to produce a new product, QBL's agreements with the world’s leading researchers are a lot more commercially productive and sensible than paying relatively new players in Australia, spending big money on building new research labs to produce new products. Canada and Israel are way ahead of Australia in their research knowledge and capacity. In addition, Australia is not yet giving permits to research and cultivate high THC Cannabis, whereas in Israel and Canada those licenses are already in place, which is particularly important as THC is possibly the most potent part of the Cannabis plant.

    QBL's alliances and agreements with the world’s leading researchers and developers in Israel and Canada are far more advanced than anything that could currently be done commercially in Australia. All the medical licenses to do the research and cultivation that MCL intends to do are all in place in the countries of operation, and at a far more advanced level than anyone in Australia. MCL believes that the company will be in a better position from a commercial stand point to utilize the already approved licenses from its Canadian and Israeli partners than spend significant money on pursuing local medical licenses and local medical research and cultivation facilities.
    The only licenses in Australia that MCL needs for its businesses, in the short to medium term, are:
    • Current hemp growing licenses which have been granted,
    • Current import licenses for sowing seeds which have been granted.
    • An import license for the Canntab product which is being worked on.
    • Under the new export laws recently announced, an export license being worked on for the locally legally recognised unique MCL seed bank genetics.
    MCL is the only company, that I am aware of, with exposure on the ASX, that has its own local legal source of Cannabis genetics.
    The current position of QBL:MCL with permits

    On the hemp /low THC side of the business, MCL farms have all their state permits to grow and cultivate and harvest hemp/low THC Cannabis for processing food and nutritional products in Australia and sell/ship abroad. Andrew has his state permits to research cultivars with more explanation about this to follow. MCL has current import licenses for different varieties of low THC seed for sowing. MCL is currently working on the import licenses for the Canntab product and is also working on export licenses for its unique seed bank and genetics to be exported overseas to be further researched, grown and produced in Israel and Canada.

    Australia or international Licenses?

    Our Israeli and Canadian partners have the full range of licenses necessary to either research or manufacture Medicinal Cannabis, with the most advanced research in the world and with world class facilities. We are already benefiting from that currently. CannTab in Canada have all their state and regulatory body MC Licenses to manufacture and produce medicinal Cannabis products; we will benefit from that immediately.

    Conclusion

    QBL is fully licensed to operate its low THC nutritional product side of the business.
    It is fully licensed for:
    • medical research
    • medical cultivation
    • and medical product development and production (including for high THC products) through its international world-leading partners.
    Other than the permit still being worked on for Australian import of the Canntab product, and the export permit for MCL's cultivars, which are anticipated to be granted in the near term, QBL is more than fully covered by its current licenses and its international partners' main Licenses. Doing a comparison between what QBL's current research and product development capacity is, and what any other local licensed company's capacity is, QBL holds significant advantages and is a leader in the Australian MM sector by virtue of the overseas broader licenses. QBL is significantly further advanced in its research and product development capabilities as one of the leading MM companies in Australia.

    Hope this helps clear things up.

    A non P.S. market announcement, with further detail, will likely be released by Sholom in the coming days.

    Cheers …59
    Last edited by Neil1959: 04/04/18
 
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