Commentary on Provisional Cannabis Referendum Results

Cannasouth Limited (NZX:CBD, Cannasouth) CEO Mark Lucas gave an interview with NewsTalk ZB on Sunday 1 November on the subject of how the cannabis referendum result (should it remain a No Vote after special votes have been counted) will affect medicinal options for patients in New Zealand. To hear the interview, click: https://www.newstalkzb.co.nz/on-air/the-sunday-session/audio/mark-lucas-conce rns-that-cannabis-referendum-result-will-affect-medicinal-options/ Should the referendum on the draft cannabis control bill, which proposes legalising recreational cannabis use for adults over the age of 20, remain a No vote Lucas says "Cannasouth has a strong business model based on the Medicinal Cannabis Access Scheme (Scheme) that came into effect on 1 April 2020." "A No vote provides certainty for our business and enables us to focus on delivering products to market as soon as possible, within the existing regulatory framework. "As medicinal cannabis becomes more widely accepted as a treatment option by prescribers, we continue to develop advanced products improving efficacy and ease of use. As clinical data is gathered, doctors and most patients will prefer the safety and reliability of pharmaceutical quality products, over black-market options." Cannasouth's first products on the market will be imported finished products under the company's brand (refer 'White Label Products Agreement' market announcement dated 4 May 2020), followed by products produced in its own facilities in New Zealand. Cannasouth is in the process of submitting product registrations for its first three white label products to the Medicinal Cannabis Agency and, if successful, expects these products to be available to patients in the first half of 2021. With the quality standards for medicinal cannabis products in New Zealand being among the highest in the world, the result is longer lead times for New Zealand companies to get products to market, and higher costs, but it will also lead to prescriber and patient confidence. Confidence will lead to volume growth and lower prices. Part of Cannasouth's R&D program is focused on bioavailability to enhance medical effects, meaning less active ingredient can deliver the desired outcome to treat a condition. The cost savings per milligram of active ingredients will lower the cost to patients, and smaller doses mean their prescription will last longer. On the question of share price volatility, Lucas said, "Nothing has changed for us. What we want is certainty, so we understand the framework we are working in. The Medicinal Cannabis sector is emerging rapidly, globally, and we intend to be a significant player in that, both locally and internationally. We will continue to build the business, reach our milestones, and ultimately get these medicines to patients as fast as possible." -ENDS- For further information visit www.cannasouth.co.nz or contact: Mark Lucas CEO, Cannasouth Limited Email: mark.lucas@cannasouth.co.nz Mobile: 021 484 649 Colin Foster CFO, Cannasouth Limited Email: colin.foster@cannasouth.co.nz Mobile: 027 577 1498 End CA:00362454 For:CBD Type:MKTUPDTE Time:2020-11-02 15:23:37