Chemesis International Inc. Provides Update on Puerto Rico Cannabis Licenses
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Chemesis International Inc. Provides Update on Puerto Rico Cannabis Licenses
June 17, 2020
Vancouver, BC – Chemesis International Inc. (CSE: CSI) (OTC: CADMF) (FRA: CWAA)
As a result of a review by the British Columbia Securities Commission, Chemesis International Inc. (the
“Company” or “Chemesis”) is pleased to provide a clarification, and summary, of certain of its disclosure with
respect to the status of the cannabis licenses it holds in Puerto Rico, including licenses (“NVPR Licenses”) held
by its subsidiary, Natural Ventures PR, LLC (“NVPR”) and licenses (“GSRX Licenses”, and together with the NVPR
Licenses, the “Licenses”) which the Company indirectly acquired through its acquisition of the majority of the
voting shares and rights of GSRX Industries Inc. (“GSRX”).
On October 23, 2019, the Company issued a press release announcing that, alongside several other companies
operating in Puerto Rico, the NVPR Licenses were subject to an administrative review (the “ Review”) being
undertaken by the Puerto Rican Department of Health (“DHPR”).
On November 1, 2019, the Company announced that, as a result of the Review, the NVPR Licenses were
effectively held in abeyance, as NVPR was not permitted to carry out any licens ed activities under the NVPR
Licenses, though it was permitted to carry out certain activities for the purposes of preserving and maintaining
inventory.
On December 9, 2019, the Company issued a press release announcing that the Company’s Puerto Rico lega l
team had applied to the Puerto Rico Court of First Instance (the “ Court”) for a declaratory judgement
establishing that the DHPR’s actions in regard to the Review were inconsistent with the legal and regulatory
framework applicable to the NVPR Licenses ( the “ Court Application ”). At such time, the NVPR Licenses
continued to be held in abeyance, though NVPR was still permitted to carry out certain activities for the
purposes of preserving and maintaining inventory.
On January 17, 2019, the Company announced that as a result of the Court Application, the Company obtained
a favourable judgement from the Court in respect of the NVPR Licenses, as the Court found that the abeyance
of the NVPR Licenses was invalid and unconstitutional and that such action was to be nullified (the “Decision”).
At such time, the NVPR Licenses were not yet reinstated to being operational and NVPR was still not permitted
to carry out any licensed activities under the NVPR Licenses, though it was permitted to carry out certain
activities for the purposes of preserving and maintaining inventory.
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On January 27, 2020, the Company issued a news release announcing that:
● the DHPR had commenced an appeal of the Decision (“Appeal”)
● the DHPR had applied for an order staying (“Application for Stay”) the effect of the Decision until the
Appeal had been heard
● the Court decided in the favour of the Company in respect of the Application for Stay, and that it
consequently did not stay the effect of the Decision
● the Company would cont inue to work with its legal team with a view to having the Decision
implemented as soon as practicable
● the NVPR Licenses were still not reinstated to being operational and NVPR was still not permitted to
carry out any licensed activities under the NVPR Licenses, though it was permitted to carry out certain
activities for the purposes of preserving and maintaining inventory.
On February 3, 2020, the Company announced that, as a result of the Decision:
● the DHPR had reinstated all of the NVPR Licenses (including all cannabis cultivation and cannabis
manufacturing licenses)
● the Decision was still under Appeal
● NVPR Licenses were reinstated to being operational and NVPR was permitted to carry out licensed
activities under the NVPR Licenses.
On March 16, 2020, the Company issued a press release announcing that its Puerto Rican operations would
remain operational during the COVID -19 pandemic per Executive Order No. 2020 -023 (the “ Order”), which
Order permitted medical cannabis establishments to continue to grow, manufacture, sell, dispatch or transport
medicinal cannabis products to patients across Puerto Rico. The Company notes that the Order also
established that the sale of cannabis is an essential service in Puerto Rico.
As a result, the NVPR Licenses remain operational.
The Company would also like to take this opportunity to provide a specific update with respect to the status of
the GSRX Licences, which Licenses, it is noted, include licenses related to the operation of dispensaries located
in the municipalities of San Juan and Carolina, Puerto Rico, respectively (the “Dispensaries”).
The original date for renewal of the GSRX Licenses was May 29, 2019. However, the Medicinal Cannabis Office
of the DHPR granted an administrative extension (the “Administrative Extension”) in respect thereof pursuant
to which the Dispensaries were permitted to carry on operations pending final approval of the renewal
applications (the “ Renewal Applications”). However, on September 27, 2019, prior to the completion of the
renewal process, the DHPR revoked the Administrative Extension. As disclosed in a GSRX news release dated
October 24, 2019, the DHPR also initiated an administrative review of the GSRX Licenses, pursuant to which
the GSRX Licenses were effectively held in abeyance, as GSRX was not permitted to carry out any licensed
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activities under the GSRX Licenses, though it was permitted to carry out certain activities for the purposes of
preserving and maintaining inventory.
GSRX challenged the DHPR ’s actions in this regard in Court, which resulted in the Court awarding (the “ GSRX
Court Decision ”) an injunction (“ Injunction”) which, in effect, reinstated the Administrative Extension. The
GSRX Court Decision resulted in the Dis pensaries being permitted to resume operations as of February 10,
2020. The Renewal Applications must now be submitted by June 30, 2020, and GSRX is in the process of
submitting the same.
The Company notes that the GSRX Court Decision is currently pendin g appeal before the Puerto Rico Court of
Appeals, as the DHPR has challenged the GSRX Court Decision. Notwithstanding, the Injunction remains in full
force and effect during the appeal process. As a result, the Dispensaries continue to operate in the ordi nary
course of business.
The Company notes that, pursuant to the Order referred to above, all cannabis dispensaries have been declared
essential services and have been exempted from the lockdown otherwise imposed by Executive Orders of the
Puerto Rico Government.
On Behalf of The Board of Directors
Josh Rosenberg
President
Investor Relations:
1 (604) 398-3378
The CSE has not reviewed, approved or disapproved the content of this press release