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COWEN COLLABORATIVE INSIGHTS February 25, 2019 kg per year, which has led to a shortage of supply. In 2018, an import license was granted to Canadian licensed producer (LP), Aurora, for 100 kg of medical cannabis per year to help meet the demand. Italy has a rich history of hemp cultivation and it used to be one of the main producers in the world prior to prohibition of the plant. The market opened up in 2016 when the government announced that a license to cultivate hemp for industrial, food, cosmetic and energy purposes was no longer required. Whereas the rest of the EU requires THC content to be below 0.2%, Italy permits a margin of up to 0.6%. Based on the license exemption, many companies started producing and selling high CBD, low THC referred to as “cannabis light.” Cannabis light products must state that the product is not for human consumption; however, once a person purchases the product the use is essentially up to their own discretion. These products are legally sold and branded as “collectors’ items.” Since it is a “collectors’ item,” imported “cannabis light” products are not taxed. However, it is necessary to have proper test and analytics when crossing the border to guarantee the product passes customs. One of the first “cannabis light” companies, EasyJoint Project, launched in 2017 and is sold in hemp specialist shops. There are now around 1,000 e-commerce sites and other retail stores that sell CBD oil, capsules, CBD for pets, dried flower, vapes and cosmetics. Legally, the Health Ministry must approve products, yet this is not frequently enforced. Foreign companies have invested in land over the last couple of years, including public Canadian companies Wayland, LGC Capital, Canopy and CROP. In 2018, Wayland entered a JV with CBD Italian Factory S.S. with plans to supply the local market with CBD for medical, therapeutic and veterinary purposes. LGC Capital entered an agreement with EasyJoint to acquire 47% of the company to gain access to the local “cannabis light” companies’ 415 retail outlets and 11 branded stores. In February 2019, Canopy made an investment in Italian organic hemp producer and CBD extractor, Canapar Corp. CROP, a Canadian holdings company, acquired 30% of Italian company, Zhemplar, to cultivate and extract low THC, high CBD products, under a white label brand, Tiffany CBD and Hempire Italia. The company also has exclusive rights with Yield Growth Corp to over 55 wellness products that can be infused with CBD. Switzerland Switzerland is recognized for its progressive drug policies and evidence based approaches. Medical cannabis has been regulated since 2008 and continued to open with regulatory changes in 2017. The number of patients is relatively small, at around 3,000 people. Prior to June 2018, it was not possible to obtain pharmaceutical grade pure CBD for medical purposes. That changed once the Food and Drug Administration in the U.S. approved Epidiolex; subsequently, the Swiss law changed, too. Pharmacies can now prepare magistral formulas for CBD for patients who meet certain conditions Although cannabis is controlled under the Narcotics Act, CBD is not included in that legislation. The country permits 1% THC to be cultivated, produced and used, which is regulated as a tobacco substitute. These products (e.g. pre-rolled joints, dried flower, and cannabis cigarettes) are regulated under the Tobacco Ordinance and can be purchased in supermarkets, specialty shops, kiosks and cafes. The first cannabis cigarette was available for purchase in 2017. These products are predominantly consumed by affluent businesspeople during breaks at work or the end of the day. The Federal Office of Public Health (FOPH) provides regulatory oversight for tobacco and CBD products. Registration with the FOPH is required for tobacco substitutes to 82 COWEN.COM HOUSE_OVERSIGHT_024898