A recent change in governmental policy has the potential to transform both the international medical cannabis industry and a South American country well-poised to supply it.
In July, the government of Colombia enacted a new law that authorizes exports of dried cannabis flower as a finished commercial product for medical use, a move expected to further stimulate the country’s ability to supply the legal cannabis marketplace. Previously, the law had only allowed the export of extracts, but the new decree also enables the production of dried cannabis flower and related goods, such as oils, creams, textiles or food containing non-psychoactive cannabis.
Colombia legalized the production of medical cannabis in 2016, and has in recent years taken substantial steps to establish an infrastructure for producing, distributing and exporting cannabis seeds and derivatives. Now, the new directive that authorizes the most popular form of cannabis should take the country’s nascent medicinal cannabis industry to new heights.
As evidenced by its longstanding presence as the leading exporter of cut flowers to the U.S., Colombia has a highly developed agricultural ecosystem. With low-cost but highly skilled labor, Colombia should be a prime resource for any organization seeking to expand the production and sale of medicinal cannabis.
Plus, an average of 12 hours of sunlight year-round makes Colombia’s climate conducive to as many as four high-yield harvests annually.
Most recent business developments have been alliances of Colombian and foreign capital, with a prominent Canadian participation which accounts for about 60% of the cases. Examples include Avicanna, a Canadian biopharmaceutical company that focuses on the development and commercialization of cannabinoids exclusively for the medical cannabis, health, and wellness markets. The company sources its raw materials for food, cosmetic, medical, and pharmaceutical industries from its subsidiaries based in Santa Marta, Colombia. PharmaCielo, another Canadian company and the world’s largest licensed cannabis producer, selected Colombia as its base of operations because of its excellent climatic and economic conditions, including its industrial history in floriculture, as well as its clear legal framework for cannabis licensing. Another successful example is Khiron Life Sciences, which has its own plantations, a research center to produce medicines and cosmetics, and recently opened a clinic for medical cannabis treatments and therapies
Several U.S. companies focused on the medical cannabis industry have also established operations in Colombia in recent years, and the new authorization allowing the growth and export of dried cannabis flower is prompting many to expand even further.
For example, One World Pharma is growing its Colombian operation by building a new extraction facility to process the cannabis flower. In fact, according to the Colombian Association of Cannabis Industries (Asocolcanna) President Rodrigo Arcila, “Colombia has the most advanced companies in Latin America, with the largest crop sizes.”
This news is further evidence that Colombia’s efforts to achieve economic growth by developing a strong medical cannabis sector are paying off. Colombian business and governmental leaders see the industry as a strong source for economic revitalization by further diversifying Colombian exports. By drawing foreign investment to Colombia, the country is supplying thousands more jobs for its citizens.
These and other business development efforts have expanded Colombia’s nascent cannabis export business, which—according to calculations made by ProColombia—is expected to reach $1.7 billion by 2030. Already, in recent years, Colombia’s pro-medical cannabis policies have drawn investments from 18 entities totaling $288 million, which government leaders estimate will create more than 2,000 jobs. Colombia has already found success exporting to the UK, Australia, Germany, Mexico and other countries.
For medical cannabis companies, the advantages of growing, producing and/or exporting Colombian dry flower are quite substantial. With the worldwide demand for medical cannabis growing exponentially, providers need new sources of high-quality dried cannabis flower and other raw materials. Agriculture-rich Colombia offers just such an opportunity, as analyst firm Fedesarollo estimates that 1,558 hectares will be licensed to grow cannabis plants by 2030.
And Colombia has the full support of its government to do just that, as its ministries of Health and Social Protection, Justice and Law, Commerce and Agriculture have all pledged their cooperation.
Colombia—known as the Gateway to South America—is perfectly located, geographically, to foster global market expansion. With easy access to ports on the Atlantic and Pacific oceans, companies seeking to market their products in North America, South America and Europe have a strong logistical advantage in Colombia. Plus, more South American countries have legalized, or are considering legalizing, cannabis—and that makes Colombia a natural jumping-off point for those markets.
Clearly, as this new law and other initiatives illustrate, Colombia is an evolving and thriving supplier for the fast-growing medicinal cannabis industry.
Ricardo Pedroza is the U.S. Director for ProColombia, the government entity in charge of promoting Colombian exports, international tourism, foreign direct investment, and Colombia’s country brand throughout the world.