Colombia is located in the north point of South America, and has ports in the Caribbean Sea and in the Pacific Ocean. Its exposure to more than 12 hours of sunlight per day all year around, and a tropical climate making it a perfect destination for cannabis cultivation.
During the past 7 years Colombia´s economy has reportedly grown at an average rate of 3.8%. This makes it the third largest economy in the region.
During the presidential term of Juan Manuel Santos, 2014-2018, an ambitious cannabis legal framework was put on track through the decree 613 of 2017. This framework allows natural and legal persons to access the cannabis industry through 4 types of licenses:
- Use of seeds to sow
- Cultivation of psychoactive cannabis plants
- Cultivation of non-psychoactive cannabis plants
- Manufacture of cannabis derivatives.
The international narcotics control board (INCB) granted a production quota of 40.5 tons to Colombia for 2019. This means Colombia is set to produce 44% of medical cannabis across the world.
Cannabis licenses granted in Colombia
Thanks to the clear medicinal cannabis framework, its geographical location, low-cost labor hand and the production quota assigned by the INCB, 12 companies decided to innovate in the cannabis industry with around 60 licenses granted in 2017.
In 2018, this number increased to 70 licensed companies in the cannabis industry, with different numbers of licenses granted for each type of used:
- Use of seeds to sow (7)
- Cultivation of psychoactive cannabis plants (40)
- Cultivation of non-psychoactive cannabis plants (48)
- Manufacture of cannabis derivatives (37)
In total, 132 licenses were granted over this time.
338 licenses have been granted between 2017 to 2019, distributed in Use of seeds to sow (35), Cultivation of psychoactive cannabis plants (83), Cultivation of non-psychoactive cannabis plants (129) and Manufacture of cannabis derivatives (91), with 15 departments involved in either cultivation or manufacture of derivates.
Since 2017, the Colombian government has permitted an increasing number of licenses across the four categories:
|License||Grants in 2018||Total grants from 2017-19|
|Use of seeds||7||35|
|Cultivation of psychoactive cannabis plants||40||83|
|Cultivation of non-psychoactive cannabis plants||48||129|
|Manufacture of derivatives||37||91|
Who are the players in the national market?
The Colombia Cannabis industry has been financed by actors from two main sectors; Colombian agriculture (the flower sector, palm oil farmers and ranches, for example), and by international investors moving mainly from Canada.
Canopy Growth is probably the biggest cannabis company in Canada, with a market value of US$15 billion, made a US$150 million investment in Colombia to consolidate its entrance in the national market in 2018.
Khiron, a Colombo-canadian company that in 2018 began trading on Toronto’s TSX Venture Exchange, now has a current market value of $185.778. Kuida is a personal care brand from Khiron, probably one of the first companies to dabble into the personal care market with cannabis-based products in Colombia.
The Canadian company CannaVerde Pharma finalized the purchase of Green Health Colombia S.A.S., in Bucaramanga. This company has a license for the cultivation, production and export of medicinal cannabis substances, both tetrahydrocannabinol (THC) and cannabidiol (CBD).
Another Canadian company, Two Hands Corporation, also agreed to purchase 100 percent of the licenses from Planto Incorporated (Colombia) to grow and export medicinal cannabis and CBD derivatives.
Nonetheless, Colombian medical cannabis companies are not falling behind. Blueberries Medical Corp was the first Colombia cannabis company to start trading in the Toronto market stock. Blueberries Medical Corp should be sending its first medical cannabis shipment to Canada by the second semester of 2019.
What can be exported, and where?
The law is clear regarding medicinal cannabis exportation from Colombia: only manufactured derivates from cannabis plants can be exported, and only for medical use.
Countries like Argentina, Chile, Mexico, Canada, Jamaica, Germany, Italy, The Netherlands, Australia, and Israel have a clear medicinal cannabis framework. They allow for different activities within the industry, such as cannabis cultivation, import and export of derivatives and manufacture of cannabis derivatives.
The cost to produce one gram of cannabis flower in Colombia can be around 5 cents, while in Canada or the United States the cost is US$1.30-$2. It is easy to explain why: Colombia’s tropical climate supports the growth of the plant, and a low-cost workforce and availability of large areas of cultivation drives prices down.
From 2017 up to today, Colombia has experienced a cannabis boom, number of licenses granted increased in vigorous way from 60 licenses granted in 2017 to more than 300 licenses granted today.
Colombia is building a strong reputation as a suitable destination to start medicinal cannabis business, and is arguably the Latin American country with the clearest legal framework for the cultivation of medicinal cannabis.
Rounding up all the socioeconomic and geographical advantages that Colombia has to offer the industry, it is easy to understand why foreign investor are choosing Colombia over other Latin American countries to start a medical cannabis business.
Getting started? Contact us for help
The cannabis sector in Colombia is open for international investors on the lookout for new opportunities. With the stable legal framework established and specific information available regarding the sector, Colombia is forecasted to become a key exporter of cannabis extracts and derivatives into the foreseeable future.
If you’re looking to enter the cannabis market in Colombia and need some guidance, we can help. At Biz Latin Hub, we want to ensure your success in entering the Latin American market of your choice.
Our team of local and expatriate experts offers a range of legal and commercial back-office services that are customized to each of our clients’ needs. We offer a streamlined process for acquiring licenses to manufacture and grow cannabis in Colombia. Let us help your business get ahead of the game.
Contact us today via email at [email protected] for personalized support. We’re ready when you are.