The Mexican Health Regulatory Agency (the Mexican FDA equivalent) (the COFEPRIS) has formally notified Xebra's Mexican subsidiary, Desart MX, SA de CV (Xebra Mexico), that it has complied with the Supreme Court mandate to grant Xebra Mexico cannabis authorizations, however, in the opinion of Xebra and its legal advisors, the COFEPRIS has not satisfactorily fulfilled the mandate of the Supreme Court. Xebra has requested the intervention of a federal judge in a timely manner to assure full compliance with the Supreme Court decision in favor of Xebra Mexico. Xebra Mexico's legal rights granted by the Supreme Court are irrefutable. Xebra's management and legal advisors are confident that the applicable authorizations are forthcoming, however, since the cannabis authorizations are without legal precedent in Mexico, visibility on timing is not reliable, and further delays can be reasonably expected.
Xebra Mexico's authorizations will apply specifically to cannabis with low levels of THC (under 1%), therefore, in practical terms, to hemp cultivation, processing, and to the manufacture and sale of mainly CBD products and certain uses of the cannabis flower. Opportunities in the hemp plastics industries have also been identified.
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