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spk02: Good morning, everyone, and welcome. It's Chris Naprawa here, Chairman of Chiron Life Sciences. I'm joined by Joel Freeman and Alvaro Torres here to answer your questions and present our Q3 results, which went out on the wire. last night. Just as we get into this, we'll give you a bit of an update, and as always, we'll answer as many questions as we can. There's a Q&A box in the bottom left side of your screen, which we will try to get to every single one, as always. We also remind you that we might make some forward-looking statements, and we refer you to the disclaimer in the presentation for all these types of presentations. Just quickly, as we get into it here, I'm going to turn it over to Alvaro and Joel. But, you know, what we said to you in the last webcast is that Q2 would mark the low watermark of the company's history, and I think that is true. I think the top line was up about 15% or so quarter on quarter. I think you can expect something similar or better than that this quarter as well. You know, we always have to go back and present our results. when we're still struggling through the heat of the pandemic. But since then, we've had some very, very good results, and Alvaro and Joel will share those with you. You guys also know that we did raise money in the last couple of weeks. There was a brief window open, and given COVID and uncertain times, it was just very, very prudent to take that cash and have everything that we need to grow the business over the next few years. And these are very exciting times for us. We've only been commercial for – uh, seven months, you know, selling cannabis in Columbia. We've learned a lot. We are getting way better at it. Uh, and that is culminated in our announcements in both Mexico. And now today in Medellin with, uh, announcing a clinic opening there, you're going to see a lot more of this type of clinic, uh, business from us. You've seen this operate very, very well in other jurisdictions, uh, like Florida, for instance. Um, so we have, we have, um, uh, We have a lot of great results that we think we can see from that model. It's a very, very capital light model. And with that, I'm going to turn it over to Alvaro to give you a bit of an update.
spk00: Thank you, Chris. Well, hello, everybody. Good morning. Thank you so much for joining us today for this webinar to discuss our Q3 financials, what we have been doing the last two months. So after the Q3 ended, where we are today and where we're headed. So I think Q3, as Chris said, you know, we... It's been tough. It was tough for the company and all across the pandemic and how these things affected us. What I'm most proud of is the fact that we were able to rebound so quickly and start showing that growth back up from Q2 in which we were just starting to sell medical cannabis. where we got the pandemic shutdowns in Colombia. Just to give you an idea of what that meant for us back in Q2, in February of this year, we were seeing about 9,000 patients a month in our two clinics. Then in April, in the middle of the Q of the second quarter, that dropped to 4,500 patients that we were seeing a month because you can understandably understand the issues regarding the pandemic and the social distancing. But I think the fact that this team was able to go back all the way from 4,500 to more than 9,000 patient services by September 30th, that shows a lot of resilience and shows that all the strategies that we took during May and June and July started to play well. One in particular was the opening of our new clinic, Serenia, in Bogota. It's a wonderful 14,000 square feet clinic, which is now sort of the anchor of the strategy for the company. The implementation of telehealth, which now accounts for almost 15% of all our consults. And that allows us to go back to our clients, insurance companies, and start talking about how we can recover down from that shutdown in April. I think the results that you're seeing on Q3, on the revenue line, on the clinic business, it started to show that, you know, we were able to recover from that. From what we can tell, you know, October and November, we are expecting additional growth on the clinic business. And this is all during the pandemic levels, and we're seeing 9,000 patients a day in Colombia. And I think it's very important for me to point that out, because in the end, you know, these things will eventually end, you know, normality will return. And I think we're extremely well positioned today to keep growing our business. So I'll start on that note, on the difficulty of how it was, but also how proud I am of everybody here that we were able to resume surgeries, that we were able to implement telehealth, that we were able to start again seeing the number of patients that we were looking for, that we had before the pandemic. But it's true that we also built this clinic and the telehealth so that we could double the capacity of the company and the clinics that we built and that we had bought. So, of course, now from now on, it's now even the pandemic, how do we expand our services? How do we keep talking to insurance companies? How do we keep increasing the funnel of patients that are coming to our clinic? I think the results, you know, the... less the exchange rate impact is, you know, more than 20% growth. And that's, you know, for me, considering the situation, something that's very commendable. And the fact that we're also now already seeing that worst part of that pandemic, we can sort of put behind us, of course, with these things you never know. We hope God knows when the vaccine will arrive and such. But The fact that we've been able to do this in the middle of the worst times of the crisis and grow, I think that's very important for us because that shows that we have the right services, that we have the right patients to trust us and the doctors to trust us as well. So from that follow comes our second line, which is, I would say, the most interesting part of what we've been seeing is the cannabis prescriptions. And I know it sounds like it's all a small number. We're talking about $110,000. But I want to point out a couple of things in there. One is we've purposely talked about how our strategy is based upon the clinic business, how we look at what's happening in Florida, what's happening in the U.S., that vertical integration that we're allowed to do in most countries, how that's going to be allowing us to be able to have a dominant position. Not only a dominant position in terms of competition and access to the demand of patients, but also on our ability to sell these products and gain a lot much larger margins than we would get when we sell it outside. We are seeing that if you look at the financials on what the gross margin of these products are. And we can talk about those gross margins because we are not here to sell bottles. We're here to sell services. And for any of you who may be Colombian and maybe have been able to access Serenia, you will see that all we focus about is access. When you think about a company that worries so much about having the right telehealth access on the right platforms, how easy can we make it for a patient that needs cannabis to have it? That's what we have been doing all three. We started sales on March 19 of this year, the day before the pandemic, the shutdowns in Colombia. And, you know, I'm not a man of excuses. So we started looking at how do we improve, how do we grow, even with what's happening here. I think we've shown that a 450% growth over the quarter is very significant, not because of the number and what is the number today, but that is telling us what's happening in the future. And that tells me two things. First of all, this is working. This is the medication that people need. A couple of weeks ago, my team reported to us our first results from observational trials that we've been running at the clinics with more than 400 patients. And to see that after three months of treatment, more than 92% of the patients are feeling significant improvement in the primary condition, that tells me that we are on the right track, that we are doing the right product, that we are asking the right questions, and that we're training the right doctors. When we started back in March, we had our five doctors who were writing prescriptions. Today we have more than 25 doctors in the clinic writing prescriptions. We have doctors who are writing more than 20 to 25 prescriptions a day. We have doctors that are writing one to two. And so what we're working on every day is how do we keep improving the knowledge of our doctors and take Serenia as that platform which we can build upon with that vertical integration. And I think that Q3 showed us that that started to work, that we have a lot of patients, that more patients are coming. It took us 12 to 14 weeks to get our first 1,000 prescriptions. And now we write 1,000 prescriptions every two and a half weeks. And it will be just a matter of time before we can get 1,000 prescriptions a week. And then that growth is going to be based on the fact that we are growing our patient attentions. We have to focus a lot on how many more services we can offer for insurance companies to keep sending us patients. We have to think about how many doctors are prescribing and how to improve that prescription rate. But when we start to see internally how our own doctors are reviewing the evidence that we're presenting to them and saying, I'm believing this more and more. We do see this noble effect of what's happening. And then you start seeing the word of mouth and how can we open serenity in our patients, which is why today the announcement we're going to open that next week in Medellin, which is a 4 million people city. And the reason we are doing that is because we are seeing that more than 25% of our patients today are calling from outside of Overland. So there is an opportunity. We do have a framework in which we are making sure that we improve the quality of life of people. And if we just keep growing at 10% on these prescriptions every month, in the next two years, we'll be doing 35,000 to 40,000 prescriptions a month. And then, you know, how do we take that model and multiply it in the countries that we're targeting? We recently announced that's how we're going to start in Mexico. Each strategy of vertical integration is very unique. I don't think there's any company in this business in this region that has thought about it that way. I think the more we see encouraging results in the United States, companies have been doing this for four years. extremely successful now. We just started six months ago with a strategy that allows us to capture our patients. I think that's very interesting. So we're going to see, again, growth this quarter on cannabis prescriptions. We're going to see how we're going to grow Serenity outside of Bogota, and that gets us very excited. When you look at the say at the well-being division uh you know a couple of months ago we talked about how difficult it was and how many times we've covered the large new products so what we've been working on the last you know three months and the next three is to position ourselves in the countries where we have been approved so that when the pandemic and shutdown stop, we can get ready to launch. So we purposely have not invested a lot of capital to be building the brand of Serenia. It's a day of CUIDA. It's been there. It's a really great brand. It's a product that's approved in Hong Kong, Spain. The European Union just approved CBD products as non-narcotics. That's a tremendous advantage for us for that type of product. We already have the product in the States, but no, we are also in the mode of wait and see, because I think we've built something really good. We cannot be in the middle of this pandemic trying to go everywhere and let's use our capital where we have to and where we can get the most value. So we will see the reactivation of Cuida probably second half of the Q1. and most likely in Europe and Asia. When those things start to happen, I'm very confident that they will. We're going to be talking about great things about why we build a global drive like that. But of course, the pandemic today gives us a lot of challenges of where to open and how to open it. But the more we rely on the digital strategy, the more we rely on distribution partners that have the know-how of the market, I think we'll be able to get there. And as you can see, we closed the quarter with a strong cash position. We've said that we've been managing our cash. We have been doing that despite all of what's happening. And the quarter-on-quarter growth that we're seeing, of course, is not yet at the level that we would like. But I just want to know how important it is, everything that we're building. And not only that, how important it is to me that that is starting to happen. We recently announced the entrance of Dr. Juan Carlos Echeverri to our board of directors. We announced that very recently, former CEO of the Coquetel, which is Colombia's largest company, and the former Minister of Finance. I think one key takeaway from our conversation with Juan Carlos was, where is the future of the cannabis industry is going to go? And to be honest, the more I see the future of this industry and this company, I am more and more saying that it's got to be all about patience. It has to be all about patience because there's plenty of supply out there. There's a lot of companies that are trying to sell the same product to everybody else. That is today creating a price compression unlike things that we haven't seen in a while. And the more we focus on the value added to the patient, the more value we can bring and the more close to our profitability we will be. And that conversation is going to happen all across Latin America. I think 2021, and I've said it in the MJB's conference, 2021 is going to show that all the countries that we're targeting are opening up. We already started selling in Peru about a month and a half ago. And, you know, the results in Peru are very encouraging because we are selling more in Peru than in Colombia, where we started, despite the fact that we don't have a clinic in Peru. That doesn't mean that we're not going to look at a way to launch Cerenia there and start using a Cerenia clinic as a launchpad for the rest of the region. Last week, we started a new program that's very interesting for us that's going to drive more doctor prescriptions in which we're now using Cerenia as our internship model. So after training doctors, we send the doctors to Cerenia to stay with us for two days so that they can see a clinic that does 80 to 90 prescriptions a day and grow it. So Once we start leveraging that more, that's going to be leveraged across the region, a lot of people are calling because the business model that we've built, the knowledge that we have built with Serenia is something that, you know, honestly, I don't think many people have in the region. So it's going to be up to us to see how we deploy the capital that we've been able to raise to grow that presence of Serenia. In the small formats that we're doing in Colombia, I think that allows us to do this very quickly, being able to leverage the hubs that we have in this area, in Bogota, and being able to access a lot more patients. Couple that with telehealth, and it's going to give what we want the most for our patients, it's access. So the fourth part of what we've been working as well, this Q3 and we will see it soon is, you know, affordability. Can patients afford these products? How do we make sure they are affordable for the long term, which is very key to our, you know, sustainability. And today, you know, I think I'm 250% confident that we will get Colombia coverage of medical coverage from the Colombian government. And we've been working very hard on that. I think being named part of the strategic national project allowed us to have that conversation with the Colombian government. I'm very confident that that's going to happen within the next, you know, before the end of this year. And once that happens, we're going to be able to access a lot more patients. And all of this matters completely if you don't have the access to the patients, if you don't have the retail strategy, if you don't have telehealth, if you don't have the doctor's training. So everything we've been working on over the years, we just have to keep doing it and keep doing it better. So, no, but we're going to expect for this quarter that's coming is more growth out of our clinics, hopefully without any issues from the pandemic that may affect that. More growth out of cannabis sales in Colombia and Peru. And, you know, we're going to now very well positioned to start showing interesting figures out of Europe once, you know, this pandemic starts to ease up on the logistics and customs issues of, you know, transcontinental type of shipments. But I think our European strategy is very sound. Our partnership with 2021 is great. We have to work out issues regarding supply and logistics to get to the more patients that we want. But those issues will be resolved very soon as these restrictions start to ease up. But I think that what's more important to us is there's a patient, there's demand. We have a strategy to win there, which is going to be always focused on the patient. And in us is how do we build a relationship? And I know all of that sounds like it's going to take a long time. And, you know, these things don't happen that easily, particularly in the pandemic, but we've been able to do this and grow despite the fact that back in Q2 we had 1,000 cases a day and now we have 9,000. And, you know, we don't believe that once these things start to mix up, what we can achieve without that is going to be a lot more significant. So I'm actually very happy and very proud of what we did. We've been growing and serving our cash. We don't have a lot of assets, which is important. We don't have to spend money on curating hundreds and hundreds of hectares for cultivation. And we are looking forward to next year being Colombia, Peru, Brazil, Mexico, and Germany. And if we keep showing the way that they're doing this in all these six jurisdictions, we're going to see a very good 2021. Of course, there's still a lot that we cannot control, but I guess my point to all the investors and to my team here is that even despite the fact that we cannot control a lot of what's happening today, we've been able to grow and we've been able to show prescriptions. And now we're reaching more than 6,000 prescriptions. And, you know, it's growing. It's growing and patients are very happy about it and doctors are continuously liking it. And it's been, you know, the fact that we're the only ones that have been really doing it uh that just tells me that there's a lot of great success in the future um i think we're still on the first half of the first inning of the world series i think international medical cannabis is a very big opportunity i think 660 million people that those are there and we're where we have a product that's working this is all about speed and it's also about acceleration And so that acceleration is a matter of, you know, when the country is allowed to export, how do we bring that leverage of Sirenia to other countries? How do we dominate those markets? How do we make great margins? I'm not thinking, I'm not saying that 90% of those margins are going to be sustainable all our lives, but certainly the way we look at taking that value to the product and the patient, I think that's what the focus is. is going to do. So, you know, we've reduced, in comparison to 2018, we have reduced our losses. We have reduced our losses in EBITDA. Our sales in the clinic were not as good as we expected as we had last year. But I think that's understandable considering the situation we're living in right now in the pandemic. And I'm more interested in seeing how that growth is happening than looking back and saying, well, yes, we dropped our revenues, but honestly, with the things that were happening in the country and what's happening worldwide, there's not a lot of business out there that are still surviving, and we're in the position that we're actually going. And the most exciting part of this conversation at this company is that We said, this is what we wanted to do. When I started this company three years ago, I said, we want to be a company focused on patients. We're going to pay vertical integration, then that's where the patients are going to come from. And that's exactly what we're doing today. We just need to keep working and growing it, increasing the attention of Serenia, increasing the physical presence of the clinic, try to expand in as many places as possible using these small formats, and we'll continue to see the growth in patients. And the fact that we're actually selling a product that works Not many people talk about that, but I think everything we're building is based on the fact that we actually have a product that works, that we spend our capital to have a product that actually 94% of the patients that take it like it and feel better about it. And that's the type of data that nobody here in Colombia and Mexico and Brazil has today. How do we leverage that data so we can grow? I think that's the biggest challenge that we have as a company. As Chris said, in a very short amount of time, it's not something that we were looking for, just the market conditions were there. And I think in these situations of uncertainty, I think it's better to have the money in the bank to be able to execute and grow. I don't want to be looking behind my shoulder and saying how many months I have left. And that's always a question surrounding everybody in this industry, because in the end, demand is going down worldwide, and there's economic damages, all of these things are happening, and we don't know what's going to happen. But we've been able to do this in the middle of the worst time of the pandemic. I'm very confident we'll continue to grow it. And it doesn't take much for us to keep doing this. Our most sales come from Colombia, but we will soon be entering pain in Brazil. And we're already starting in Peru, and we'll soon be entering Mexico as well. And we are coming to this country that's very sound. And it's also very unique, because in the end, there's only one cannabis clinic in Colombia that has the type of data and numbers that we have. So that being said, yes.
spk02: We're just on the sake of time, because some of these are going to be questions that are going to come up here anyways, because I think there's a bunch getting packed up. But maybe just before we answer questions, can we just go to Joel quickly, just to do the highlight on the financials?
spk01: Thank you, Chris, and thank you, Alvaro. I think Chris's comments and Alvaro's comments have talked about a lot of the themes, and I'm going to focus on key financial highlights from our Q3 results. When we look at cash, cash used in the third quarter was about $5.5 million compared to Q2. This represented an increase as a result of the activity throughout the company increasing from the low levels experienced due to the COVID-19 impact. We finished the quarter with $14.7 million in cash. That was driven with the help of our continued cost containment measures in line with Q2. And subsequent to the quarter, as was noted, we closed the financing for gross proceeds of $14.5 million. This significantly increases our cash resources. and positions the company to better manage both new growth opportunities and any additional potential impacts of COVID-19 as we proceed into and through 2021. Another contributive factor to this lower levels of cash burn was the limited capex as the significant capital is behind us. Looking at revenues, revenues in Q3 increased about 15% from Q2, to 1.9 million. Clinic services increased from the low levels experienced in Q2, while medical cannabis continued to accelerate in Colombia with monthly growth in prescriptions. And revenues for medical cannabis in Colombia are expected to continue increasing as these prescriptions progress. And with the contributions from the partnerships with the clinics and health centers that was entered into in September. additionally in the third quarter medical cannabis revenues started in the uk and peru and the revenues from medical cannabis are expected to continue to grow period over period going forward as they progress similar to colombia the net loss of 6.7 million q3 compared with 5.7 million in q2 as the activities across the company ramped up from the second quarter Compared to the prior year periods, net losses have decreased 37% and 23% quarter-to-date and year-to-date, respectively. On an EBITDA basis, in Q3 2020, we had a loss of $4.7 million compared to a loss of $5.4 million in Q3 2019. On a year-to-date basis, the loss decreased to $14.4 million compared to $18.2 million year-to-date 2019. The financial effects from COVID-19, including the reduced revenues from our health centers, caused by a combination of reduced patient visits that helped us to ensure the safety of our patients and reduced surgeries, impacted these revenue numbers year over year, resulting in EBITDA, combined with the devaluation of the Colombian peso. As mentioned there, the margins on the clinic services declined compared to prior periods as a result of the ramp up in activity levels while managing the impact of COVID-19 on the operations. As clinic revenues that we saw in late Q3 continue to progress back to our steady state levels pre-pandemic, we expect these margins will continue to come back. Chris, I'll hand it back to you and we can move into the Q&A.
spk02: Thanks, guys. Appreciate that. So there's two or three questions. I'm just going to try to group these together for time's sake. There's two or three questions around UK supply chain and 2021 specifically. So what I want to tell you guys is there are some teething pains with that program, but it is working. Just so everyone understands, like, The prescriptions have to be written before we can bring the supply in. We're not allowed to stockpile to the extent that we would in a normal kind of situation like we would at our own clinics. Maybe that situation will change or that particular set of rules will change. There's a little bit more red tape than I think a mature market would like to have, but we are overcoming that and patients are getting medicine. um it's just harder for new people but the good news is there is that there's tremendous demand and um you know it's a brand new program we were the first ones to get thc flower into that program um and when you're first you always have to kind of deal with the kinks in the road and that's that's true for for everything across the board um there's there's two or three questions around the financing um and i'll take that one and then i'll turn the questions over to these guys but Listen guys, what we said to everybody is that we had the working capital necessary to execute our plan. And that is the case as you saw that we finished with just under $15 million and still with no debt on the books and owning all our own assets. So we had the ability to lever up. The question was, A, what's the impact of COVID going to be in the next couple of quarters, which nobody has the answer for, no one. And two, as we worked through the summer into the fall and saw the great results we're seeing out of the clinics and really, really getting better and better at prescribing medical cannabis, we saw the opportunity to grow the clinic network in the way that Alvarez just described. That is an excellent use of cash and we think will pay off dividends for us in the future. So now is the time to think about expanding, not just get into cash flow neutral. None of us got into this business from day one just to get the cash flow neutral. That's not the goal. The goal here, as always been stated, is to grow. Okay. Alvaro, there's two or three questions here on Brazil, and I'll lump in Mexico there, too. There's some Mexico questions. Just what's the quick update on Mexico and Brazil?
spk00: Well, I'll start with Mexico is the most recent news, and I think we can all be encouraged by the fact that The Senate of Mexico just approved the use of idle-use cannabis and the definitions of hemp. Of course, there's still a couple of regulatory steps that have to happen, but I think most encouraging of all is that they actually complied with the timing that they had set, and it's an actual direction of what this market is going to look like. They are already publishing the regulations for medical cannabis, as we speak, and I think the way that that's going to happen, it starts to put A market that, you know, we have said, Chris, and everybody that, you know, we were waiting to see all these regulations because we've been talking about Mexico for a long time. We do have a relationship in Mexico that's very strong with the Tech of Monterrey as well. Our training program comes from the Tech of Monterrey, which is the number one university in Mexico. And I think everything that we talk about Serenian is very well taken there, and that's how we plan to enter that market. It's a very big market. It's 120 million people, more than that. And, you know, a lot more purchasing power and, you know, with a great, great prospect. So we've been in Mexico for quite some time, and we understand how the market is going to work, and now we understand the regulations. And, you know, we are a company that put the first – legal cannabis into Scotland. We're the first company to sell cannabis in Peru as a private company. We are going to be one of the first companies to start using Uruguay as a new hub for distribution. We do know what we're doing when it comes to regulation. So being first and being able to break those jungles. So I'm very excited about Mexico for next year. And I think we're going to be relying a lot on Sirenia to leverage all that information that we have here. Regarding Brazil, as you know, I think it's the largest medical market in the world, 230 million people. We have a strategy there that's based upon building relations with clinics and hospitals, bringing serenias, taking doctors from Brazil to Colombia to be trained in serenia for internships. All of that is happening as we speak. We've been waiting a lot for some regulations that allow us to to a more easy logistics. There's, as you know, you may not know, but Brazil's already passed regulation to... to register products, so we are on that path. But I think the compassionate care use in Brazil, there's a lot of opportunities there. It just so happens that, you know, the products that are being sold in Brazil are coming from the United States. And because of the compassionate care ways, you cannot store product in Brazil. So you can imagine taking a 30-milliliter bottle all the way from Colorado, crossing the Gulf of Mexico, crossing the Andes, then getting to the Amazon River and getting to a patient very expensive. So now that we have a better logistics sense of how we're going to be able to do that, that we've been partnering with companies like Dr. Canales to be able to talk about our products online, that we've been partnering with companies like Medlife that are going to be taking American education courses. to more than 3,000 clinics and hospitals in the south of Brazil, and that we have a hope for distribution in Uruguay, complementing all of that with the knowledge of Serenia and the data that we've been building. I think it's going to be very interesting for us starting Q1 of next year. So we're very excited about Brazil, very excited about Mexico. I think right now we've been building the building foundations of what's going to make our company successful. Because we're no longer talking about the theory of medical cannabis. We're actually talking about what's happening to our patients in our clinics with our products. And once we start looking, and I want you to think about the same type of product with the same type of data all across Colombia, Mexico, Peru, and Brazil, that information is going to be very valuable. Because in the end, that's what big pharma wants to look at. Nobody wants the 100 hectares of land. We have to think about how much the demand that we're building, what's the evidence that we're building with our own products. Those products are sustainable across from Mexico to Brazil. And so I think next year is going to be very excited about that.
spk02: Okay. There's a couple of questions in here about clinics versus telehealth and, you know, a theme of like, well, we've also got the 15 other outside clinics that we're partnering with, so why build our own? So can we speak to the importance of telehealth continuing with our business and, you know, our own clinics versus our partners?
spk00: Okay, this is all about access. This is the company's and my and the company's obsession every day. It's about access. How do we ensure that more people that need this medication have it? So we have partnerships with the 15 clinics. These are big cities. For those of you who are living, Medellín is 4 million people. Bogota has 9 million people. So it's important to be able to give access to the people and to the patients everywhere they are. So that's why we've been partnered with clinics in other cities. The reason we decided to open our own Cerenia in Medellin is because we're also seeing that there's unserviced needs in some parts of these cities that cannot be met by the partnering of outside clinics. And that's the reason we are doing it in a different format, small formats that can complement our hub and spoke model with the big location here in Boateng. And that gets complemented with telehealth. We cannot underestimate the importance that telehealth had for us to grow these patient services in this quarter, but now we also have to realize that we have a lot of patients that have a lot of different needs. Today, for example, In these cities, or in Bogota, we have a lot of patients that are using the platform because they want to have the ability to do their schedules and appointments. But for people who are more than 65, 70 years old, that have been locked up for six, seven months, they're also looking for the opportunity to leave their house to go and see a doctor. This is all about giving chances and opportunities and options to different patients. That's why we partnered with pharmacies. That's why the drug can be dispensed in pharmacies. That's why we have telehealth. That's why we're going to open new serenity. And in that axis, I think we're going to have an unparalleled competition because in the end, any patient that wants to get medical cannabis and be well-treated is going to have telehealth, clinics in Bogota, third-party clinics, whatever is at your best convenience. And if we don't focus on access, then we'll be fighting for price and we'll be fighting for bottles. And this company doesn't fight for bottles. We fight for service. So that's the way we're going to keep expanding Serenity in those small formats. We're going to complement that with telehealth so that we can access areas that we normally couldn't. And just I know I don't want to take too long, but just to give you an idea of what telehealth has done for us. We have patients in a town called Leticia, for those of you who are Colombian, Colombia, you understand this is the southest city in Colombia, in the Amazon jungle, in the Amazon department. If we didn't have telehealth, we couldn't reach those patients. we've been able to get the medication within three days and that service and that service what people start to talk about when they talk about serenity so all of these things are complementary um and you know we live in an area that's moving on digital but that also wants to get out and and be able to walk a little so the more access we can offer to patients i think the the more difficult would be for a patient not that needs cannabis not to access a chiron and serenity so That's why we continue to complement those two. We will be doing that in every country that we are targeting.
spk02: Yeah, I think that's a good answer to that question. Thank you. And I think that also answers David's question here about how we're going to grow revenues. And it's all about now access to patients. And the more patients we see, the more cannabis we will prescribe. And it's all about convenience for everybody. So there's another question here about will we see medical or telehealth services in the UK and I think that's a really fair question and I think the answer to that is absolutely you will see that extended in the UK we've got doctors who are registered to practice all over the world that now work for us and we have doctors working in Mexico prescribing in Colombia and Peru and you know it's it's really starting to come together from that standpoint a couple questions here on Germany what's the update on Germany and what's going on there
spk00: Well, so we've been talking about our relationship with Nimbus Health. That's working very well. I think today, as you said before, Chris, we made a conscious choice, and I know we've been publicly talking about it, but I think it's important to talk about that. The German market, European market are very focused on EU GNP, on dry flour as well of high quality, and on extras. As you know, Colombia cannot export dry flour. We've purposely decided to come up with a strategy with a third party EU GMP supplier out of Europe. I think today we can see that if it's difficult to ship from within Europe, it's more difficult to try to ship a lot of quality and transcontinental and in the right time. So we've been working with a partner in Europe that has some relationship for us. so that we could develop the products that we needed. And today, same as UK, we're going through all the motions of logistics, customs, regulations. And so these are the hiccups that we have to go through as, you know, all those first mover advantage and trying to do things really first to be able to ship flour. And we're going to be seeing our shipments in Germany coming very soon, as soon as we can. get out of all these logistics and customs and timing issues. But these are, I think, for me, one time, because once you get that done, it's going to be much easier to go. So certainly, Germany, we're going to start seeing some in Q1. at least a recording of revenues. I think we already started training doctors in Germany, taking our Chiron Academy there. We've been developing all these courses. We have the evidence that we can show, and that's going to get a lot of traction. It is an interesting market. It is growing, and there's a lot of competition there, yes, but The more we can talk about our brand and what our company represents, our ESG values, then that's going to communicate a lot better with the patients and working with our partner distribution so that we can access as many pharmacies as possible. And the same thing will happen in the UK. Of course, in the UK, we have the advantage of 2021.
spk02: All right, so a couple more questions here. Robert's asking about pricing trends. I'll say, Robert, the pricing has been stable in our regions. There's been no real movement up or down. It's just been stable since we started. A question from Alexander about, you know, what do you see as your economic moat and do you compare it with Cresco or Aphria? I think, you know, if you're looking for comparables for us, it'd be more like a Columbia Care or Trulieve would be more like the kind of business that we're running, you know, very much focused on clinics and service and accessibility. You know, I think Trulieve started their first clinic back in 2016 and sold their first gram and then, you know, now have 50% market share in Florida. You know, we sold our first gram or prescribed our first gram in March of this year, of 2020. We have over 90% market share today in Colombia and a country of 50 million people. So we're trying to get out to those folks as much as we possibly can. We do outreach on the telephones. We do telehealth. We're opening up small satellite clinics. If that goes well, you'll see us open up a whole lot more, and there's already a model for that. Make sure I answered all Tommy's questions here. I think we got to you, Tommy. Always thank you very much for that. Could you elaborate on some specific benefits of the PINE certification?
spk00: Well, yes, I think... I think we'll start to see that very soon, publicly, what that has helped us to do. But I think the biggest thing that we see today is speed. I think for the companies that receive this status, these two things. First, that when this new government came into power, there was a lot of skepticism because the more conservative the government, are they gonna support cannabis? I think the absolute answer today is yes. Not only yes, but more than the last government. That's something you can take out because this status is very important. Only projects like the Metro Boat are awarded this status. What that gives us is speed. Speed on what? Certifications on paperwork, how to export, how to talk to customers out of Colombia, and how to get conversations going that, although I cannot give you the details, are going to be very significant for the country. I think our strategy as a PINES, P-I-N-E-S, has always been to increase access. Again, the word for me is always going to be access. And we're going to be seeing very soon that those conversations are going to pay off because I think the current government today is also focused on how to increase access because they realize that this is a strong industry. And there's two sides of it. Of course, there's the export, low-cost export alternative, but there's also the opportunity to improve the quality of people, of health, and to honestly also reduce the burden of, you know, on medications, on the economy system, on the health system. So we're going to see a lot of good things that are going to happen at that. And the speed at which we're able to get a lot more approvals going, I think that that's very important. And we will be seeing that in the next couple of weeks of what those conversations are going to entail. But, you know, we've been able to export to Peru. We were the first company to ever export to Peru before. privately. And that's also partly because of our ability to talk to the colonial authorities to make a lot of this red tape much easier to handle. And that's not just for us, that's for the rest of the country. So, being at the vanguard of that, I think we're going to start showing a lot of good results. We will be seeing that very soon.
spk02: All right, so next question is about, you know, can our production and cultivation keep up with our future growth? You know, I think that's from Peter. You know, just understand that with our current capacity, we have installed paid-for capacity to make about 4 million units a year. I don't know if you have a bottle in front of you there, Alvaro, but a 30-mil bottle, which is our typical format in South America. We can make about 4 million of those a year. Our average sale price is somewhere between $40 and $50 Canadian. So that gives you an idea of what's already there. So we've got a long way to go before we're going to run out of capacity anytime soon.
spk00: Yeah, Chris, I think demand concerns and supply. I think there's plenty of good supply in Colombia that's continuously dropping in price if we ever needed to tackle that. So that's not a concern that we should be having for the next couple of years.
spk02: Yeah. next one is on insurance coverage because we've mentioned that a couple of times i think alvaro said today that he's 250 sure that we're going to get insurance coverage in colombia that's a very high percentage of of assurance that i think we've provided the market so just stay tuned on that one there's only Other than the German market, I don't know of another national supported program in the world right now. If anybody's out there, correct me, please, if I'm wrong about that. But that levels the playing field as far as economics go in a country of this size. that once it's covered by insurance, it makes it much more accessible to just about anybody. And, you know, when we're working with insurance companies and regulators, we keep data on absolutely everything that goes on in Cairo. We're able to show patient outcomes in aggregate and individually. We can work with them and show them those outcomes. And that is, you know, the proof. As our former prime minister here said, the proof is the proof. And we got the good proof here. Okay. What type of revenue do you expect? Okay, we're not going to talk about revenues in Mexico just yet. Okay, have you got GMP Europe certification? And why don't you work with a distributor in Germany? Well, we do work with a distributor in Germany. We work with one called Nimbus. We announced that a while back. Our facilities in Colombia are EU GMP compliant. During COVID, it's really hard to get this stuff certified. You need people to travel. But for now, we have supply chain worked out in Europe with EU GMP supply in Europe, and we have certainly the quality for Colombia. Okay. I think we've gotten to most. Maybe we'll just add a couple of closing remarks there, Alvaro, as we see if there's another one that comes in.
spk00: Yes. Well, thank you, Chris. I think, again, we have to look back at what the company was built for and where the strategy is sound or not. And I see that every day because every day we're writing prescriptions. When we see patients and when we talk about patients that are improving their quality of life because of the work that we do at Chiron, I think that's very gratifying. That shows that we're in the right path. We always want more speed. I'm the first one to ask of our team, tremendous efforts to keep growing and keep growing fast. The reality is also that we've been able to do this in the worst times that most of us have seen. We've been able to look back and look up and say, we're going to get this done. We're thinking of growing. We're not thinking of shrinking. And we're not the type of company where they stand away from how to grow more. The reality is that we are in the first 30 stages of what this industry is going to be. Cannabis is not going to go away anytime soon. And, you know, for anybody who's in the town, we do have a very recognized brand. We are known in the region all across from Mexico to Brazil for the quality of our products, for the quality of our education, and a lot of people want to work with our company. And I think all of that goodwill that we're building is starting to show in terms of how many prescriptions we're having. I will just leave you with, as I said to you, Chris, many times and to everybody in the company, we work on four things in this company every day. Number one, how many doctors can we get to prescribe? What's the daily prescription per doctor? And that's a measure that we have to take every day. Today, we have 25 in our clinic. In a month, we have 50. So we have to keep showing these doctors how the evidence so that we can have a lot of doctors who believe in this. The more they believe in it, the more prescriptions we will write. Second, we have to increase demand. And for that, we need to, based on our clinics, continue to convince our insurance companies, clients to send us more patients, talk to private companies, offer new types of services, expand our clinic base, advertise at any of them. advertisement, we can have more people out of pocket to call us. And that is working very well. And we have to continue doing that, multiplied by five countries. The third is access. And you're going to hear this word a lot. And if you look at every press release that we've done about distribution, it's all about ensuring access. I believe that a company that we are not competing for product. I know you were talking a little bit about price compressions and things like that. And of course, those things will happen in the future. But if you are working in the commodity business, you are suffering today from price compression significantly. Our objective is to improve access so that we can bring more value. So we don't have to be in those conversations in the three years from now. If we don't build that today, it's going to be very hard to build next day in 2022. So access is very important. Telehealth, patient retention programs. For us, it's more expensive to acquire a new patient than to retain them. And so we focus a lot of our efforts to make sure that every patient that comes into Chiron, as much as you can, that that patient stays with the program. And that means service, that means access, that means continuously thinking about the welfare of that patient and the people who take care of that patient as well. And fourth is about economics. When we started this program, I think we've done a good strategy on pricing. Some of the first comments that we got were, how can people afford it? And we'll just talk about that with a couple of investors before this call. And we've been showing that people can afford it. Of course, there are patients who cannot continue to pay for it. And this is why we have been working so hard in the last months six months to ensure access. And when we said what we said about insurance, I'm very confident that we'll get that done. And that's going to work for everybody, not just for Kyrie. But that's going to be done because of our continuing efforts to make sure that any patient that wants this medication can have it. If it's not responsible, if the doctor... want to prescribe it, that patient should have it and should be able to walk a block away from your house and get it in a pharmacy, should be able to go to our clinics and get it, should be able to get it on telehealth, should be able to get it home going cells, should be able to go log on to their phones and try to get it there. And in that conversation, I think we are very unique because we are thinking about that access all the time. And so once that happens, then we will take that model and start talking to the rest of the country. It's not going to happen overnight. But, you know, Colombia has been leading the way in terms of regulation. A lot of countries look upon us, and I know we always think about all the delays that these things happen, but we have to remember that most of these companies, like the US and Canada, they've been doing this for six, seven years. And so we are just in the first times of what's happening internationally. I think we have to look at those opportunities and look how a company like this can get to that million patients. And that goal is still there for us. attainable. A million patients in one year, that means 100,000 patients a month. in five countries. When we look at the way we're growing and if we keep applying this, how do we take our Serenia brand and our education, that's a goal that we can attain very simply. And it's going to be a sustainable goal. And to know, I know a lot of people will probably, we think a lot about the short term and short term matters. But that's also why today we can think about the long term as well. Today we can talk with Chris and the board and with Juan Carlos about growth. People like Juan Carlos Giveri don't join a company that's trying to shrink. They're trying to join a company that wants to grow and dominate. I think we have the right strategy. Of course, we have to adapt to COVID, pandemics, logistics, all of these things. But we are a very adaptable company. And we've been doing it, reducing our cash resources and being able to be saving the money where it needs to, but without losing the focus that we are here to grow. We're here to get a million patients in 2024. That goal is still there. And now we're seeing how we're going to get it done. We have to do it faster, of course. But next year we'll see at least Colombia, Mexico, Peru and Brazil sales. And that's, you know, we're talking about four countries that together have, I would say, 450 million people. and we're in a unique position to dominate that because we are so focused on that patient and that doctor. And then whatever the supply chain eventually eventualities of how the rest of the Colombian companies and Latin American companies are producing, and that's great for us too because the better quality, the lower price you can get, that's even better. We keep focusing on acquiring that patient, building that demand. Because if we don't get that demand, if we don't build the demand, it doesn't matter how much supply you have. And so I think the opportunities for Latam are great. And I was talking to somebody before, you know, we're talking about a region of 660 million people. And I think we can name with our hands the number of companies that we think can win in that market. You tell me 10 companies in that time, that's a huge market. And so we just need to be patient. We need to keep doing what we're doing. We cannot get scared. We cannot be panicking. We have to look always up. We've endured a lot during the pandemic. We're still enduring it, but we're growing. And I think that shows resilience and that shows the type of company that we have. And we have been doing it ethically. which for me and for the company is extremely important. Ethics matter because in the end, they catch up to you. So as much as sometimes we see the short route, we could probably do something much faster. I'd rather take a route that's going to get us there more sustainable. So I think for all our investors, thank you for all your patience, all your support. To all of you who have reached out to us personally, thank you as well for giving us your feedback. We take all of that in very good And we are working very diligently to make sure that we keep showing the results. But I don't want us to lose sight of what the big price is. The big price, this is a marathon. This is not a 100-meter dash. And that big price of a million patients in 2024 is there for grabs. And it's not a market that is there. We have to go and build it. But now that we can do it with Serenia, I think it just gives us a lot of opportunity to grow with that. And, you know, the United States companies are showing us how they did that model and how it's working. And, you know, that's great to be able to see the future today. So we're just going to try to do it our way, keep thinking about vertical integration, keep thinking about quality, keep educating doctors, keep grabbing patients and making sure those patients stay, keep improving lives. And I think that objective has been there with us from day one. I think we'll stay with us until the last day. So thank you so much to everybody for all your support.
spk02: Thank you, Alvaro. And guys, thanks for all of you to attend. We're going to continue to try to be transparent and communicate to those of you that have entered in some more pointed questions in there. Listen, we're... We're working away. This business is far better than it was last quarter and the quarter before. We're commercializing it. We're seeing it every single day. We're seeing the progress, and we're building something here that's very, very durable and sustainable. So really proud of the effort that everyone's put in. Thank you all for attending today, and we will see you next quarter.
spk00: Thank you. Thank you.
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