Crucial Steps for Starting Your Colombian Cannabis Business

Establishing a business in any new market comes with its own set of complexities and hurdles, and many entrepreneurs seek out all the support they can get from seasoned experts.

In Colombia, an economic revolution is underway. Since the government’s decision to legalize cannabis in 2017, Colombia has joined a small but growing group of countries set to benefit from the impending boom. Worldwide supply shortages and Colombia’s market advantages are leading many businesses to make the move into the thriving economy.

To secure your future in this booming industry, we outline several essentials entrepreneurs must keep in mind to kickstart their cannabis business in Colombia. 

Apply for a cannabis license in Colombia

It’s vital that your business understands the legal requirements around operating in the cannabis industry in Colombia. Though young, this emerging commercial opportunity is borne of a carefully designed framework outlining how to grow and manufacture the plant.

Specifically, there are four licenses available to companies and individuals that enable and shape their business activities:

• Use of cannabis seeds
• Manufacture of cannabis derivatives
• Cultivating non-psychoactive cannabis
• Cultivating psycho-active cannabis.

Two government agencies have split responsibilities for issuing these licenses: the Ministry of Justice and Law, and the Ministry of Health and Social Protection.

These licenses allow for several different activities within their jurisdiction, that you can opt-in or -out of in your license application. For example, the license for the use of cannabis seeds permits businesses to distribute the seeds, and also use them for scientific purposes. If you’re only interested in distributing the seeds, you can apply for that distinct activity as opposed to the whole license.

In our article ‘How to get a manufacturing license for cannabis in Colombia,’ you can find further information on the scope of activities each license covers, such as the following:

Get clued up on the legislative do’s and don’t’s

Note that currently, the laws for cannabis production in Colombia still exclude operations to produce cannabis for recreational purposes. The framework regulates production, distribution and use of cannabis for medicinal and scientific purposes only.

In particular, Colombian legislation stipulates that cannabis flowers cannot be exported – this is the part of the cannabis plant typically used for smoking. The framework does allow for the exports of derivative products, as noted in the licensing information above.

Understand the international standards

Following decriminalization in several countries in Latin America, and major consumers like Canada and the UK, Colombia is carving out a place for itself as a key contributor to markets high in demand for cannabis. The country offers optimal commercial, geographical and environmental conditions to excel in cannabis production and exportation.

Now that cannabis and derivative products are changing hands on a global scale, certain international measures are being enforced that go above and beyond the standards Colombia has set for itself locally.

It’s essential, therefore, that as a cannabis exporter, you understand the requirements of these varied standards, such as Good Manufacturing Processes (GMP) and Good Production Processes (GPP). These standards set rules in Canada, the US and Europe for good-practice measures in cannabis production and distribution, such as:

• testing to determine and declare THC and CBD levels of products
• testing for microbial contamination, pesticides, and heavy metals.

Additionally, in Europe, cannabis and related products fall under the Good Agricultural and Collection Practices (GACP), and must therefore be taken into account by businesses looking to export to that region.

International standards ensure transparency and add a layer of uniform and safety to the products emerging from this booming industry.

Have a clear strategy and identify your market

As with any market entry plan, you need to be prepared for your expansion into Colombia with a comprehensive strategy. Seeking local advice and expertise can help you cover all the necessary bases for market entry.

Colombia’s business environment and regulatory mechanisms will almost certainly be quite different from those of your headquarters. Ensuring you’ve done sound preliminary market research and understanding costs and wait times for company formation is the best way to foresee your next steps. Having a solid plan will also ease any concerns in the face of unexpected obstacles, as having clear goals means being better able steer yourself back on track.

Start the conversation with Biz Latin Hub 

Expanding overseas is a very demanding process for well-established companies and start-ups alike. Colombia offers great opportunities for those willing to break into the cannabis market, but can throw up some curveballs in the formation and licensing processes.

At Biz Latin Hub, our dedicated team of local and expatriate professionals offers comprehensive support to make your expansion and incorporation process as smooth and painless as possible. Our full suite of market entry and back-office services are completely customizable, ensuring you get exactly the right assistance for your business.

Start a conversation with us – reach out to our Colombia team now to connect with the country’s leading cannabis legal experts and jump-start your Colombian operations.

Learn more about our team and expert authors.