ICC'S CONTRACTS AS PER RTO FINANCIAL STATEMENTS17.1.
Recreational Cannabis – License
On October 1, 2015, the Institute for the Regulation and Control of Cannabis (“Instituto de Regulaciny Control del Cannabis” or “IRCCA”) in its resolution N° 57/2015 granted to ICC a license to produce and distribute psychoactive cannabis of non-medical use to be dispensed in pharmacies, pursuant to the provisions in Law N° 19.172, the respective regulations and what is established in the specifications set out during the tender processes N° 1/2014 and N° 2/2014 of IRCCA.
On January 14, 2016, the “Contract for the production and distribution of psychoactive cannabis for non-medical use for dispensing in pharmacies” between the IRCCA and ICC was signed. The contract establishes that, among other things:
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IRCCA grants to ICC, a license for the production and distribution of psychoactive cannabis of
non-medical use for dispensing in pharmacies, of 2 (two) annual tonnes.
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The cost of the license is made up as follows: a) a fixed cost of $20,000 annually and b) a
variable
cost of 10% of the sales of the producer to pharmacies.
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The term of this license is five years from January 14, 2016 and it can be revoked in case of
non-compliance.
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Production shall be done on government owned land. -
It is prohibited for the licensee to trade products to non-authorized third parties, IRCCA being
in charge of providing the list of authorized parties.
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IRCCA shall determine the variety of cannabis to be produced, providing the licensee with the
initial genetic material for the first multiplication, reserving for itself the right to introduce and
define changes in the varieties to be produced, at any time during the validity of the license.
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The sale price of the product to pharmacies is $0.90 per gram for the first year of production,
adjustable thereafter according to the conditions appearing in the specifications of the tender
process N° 2/2014.
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