Over the last two years, Colombia has provided a hub for cannabis businesses of all shapes and sizes and from all over the world. Since the law reform in 2017, Colombia has granted 338 licenses and, in doing so, has brought over 120 businesses to its shores.
Colombia has attracted cannabis businesses for a number of reasons. Not only does it have favorable laws, but cheap production costs, a skilled agriculture sector and an advantageous climate, make Colombia an optimal environment for growers. From 2019, Colombia intends to produce 40.5 tons of medicinal cannabis a year, more than any other country. This trail-blazing plan will certainly make up a large portion of the 2025 global industry valuation of $USD 63 billion.
Having introduced a number of businesses to the Colombian cannabis industry, we outline 5 tips our most successful clients have applied to their operations.
Use a Market Entry Specialist
Market entry specialists are useful to any business coming into a new region or market, but they demonstrate further value when the industry is a new one. Before entering the market, the business model must be set out clearly in your mind and on paper. Being early to the market is great, but being a first-mover with a cobbled-together business plan will only result in problems later on.
Know the competitors and know your consumers. With the help of a market entry specialist, you can learn about your new commercial landscape and ensure your business is constantly up to date.
Form a cannabis business plan
For years, the cannabis industry in Colombia has been outlawed. Now legalized, it is crucial that you have legal experts on board to help navigate the new regulatory framework.
Colombia has manufactured a solid legal base for the new industry, however new laws are published every year that businesses must be attentive to. Trying to keep up with new regulation can be a real headache for new firms starting out their journey.
By following instruction and procedure to the letter, your business will be off to a strong start. If not, major penalties can be incurred. Cutting corners to speed up your route to production is not the correct route. Legal, financial and corporate advice are all elements you should consider utilizing.
Define the product subject to licensing
Colombia created four licenses that businesses can apply for:
- Use of seeds to sow
- Cultivation of psychoactive cannabis plants
- Cultivation of non-psychoactive cannabis plants
- Manufacture of cannabis derivatives.
Businesses can obtain all four licenses or, if they know the specific market they are targeting, apply for one or two for a more specialized and specific approach. By knowing what type of products you want to produce within the range of different markets in the industry, you will save undue costs and time.
For instance, if you are looking to produce a marketable product containing highly beneficial hemp seeds, there is, of course, no need to buy any of the other three licenses.
Do research on the local environment
Both Colombia’s financial and physical climate can, at first, seem very alien to incoming businesses. The best businesses have not been the first ones to start selling products; they have been the ones who have done the most research and reconnaissance before setting up operations.
Cannabis growing and cannabis export are two complex markets. Some companies have taken up to two years to conduct research on the financial and physical landscape. Things to consider before growing a plant in Colombia are soil conditions, nutrients, climate, altitude, plant genomes and landscape.
Other elements to consider are building connections with fellow producers, seeking out skilled labor and knowing your competition. Local knowledge is invaluable.
Be ready to adapt
The medical cannabis industry is a new one. Changes are constant. Without a history or precedent, it is often difficult to know what is best for your business. Therefore, adapting with the times is paramount.
By staying in tune with the changes in the law, changes in techniques and machinery, and changes in public opinion, your business will remain modern and up to date. Keeping one eye on the exciting future and the other on the volatile present, you ensure you cover every base.
Colombia has become the nucleus for cannabis production, nevertheless, other surrounding countries are on the verge of legalizing. Keep in touch with news and your legal representatives, and be first to the industry in a new country.
Start strong with Biz Latin Hub
Colombia is one of the most ideal places for agricultural business in the world. The opportunities in the global cannabis market are booming to reflect the change in social, political and commercial attitudes towards this plant.
Without a doubt, the potential of cannabis in Colombia is a key economic opportunity in this region. Entering this type of market presents huge returns for first movers. However, entering this industry relies on effective knowledge of local laws and a sound formation strategy. The process of setting-up isn’t always the easiest to navigate in Colombia, so you should seek assistance from a local law firm with a good understanding of Colombia’s legislation.
Learn more top tips for building a successful business in the medicinal cannabis industry, by reaching out to us at [email protected]. We can offer personalized support in market entry and back-office services which are crucial to starting off on the right foot.
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