Colombia is the country to watch for its trail-blazing development of its medicinal cannabis industry. Its cheap production costs, ideal climate, progressive legal framework, and geographic location give Colombia a leading edge in the global market.
With medicinal cannabis estimated to grow into USD$43 billion-dollar market by 2025, pharmaceutical companies are looking to Colombia to fill shortages of medicinal cannabis, and prepare for the projected cannabis boom.
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Pharmaceutical interest in Colombian Cannabis – Searching for new solutions
The pharmaceutical industry is investigating the use of cannabis, or more specifically, components of the plant. These components are referred to as cannabinoids, specifically cannabidiol (CBD) and the more commonly known tetrahydrocannabinol (THC).
Studies and patient experience research into cannabis’ potential uses is ongoing. In the meantime, countries around the world are now altering their legislation in waves around the use of medical cannabis. This momentum is the reason behind the expected boom in the medicinal cannabis industry. Companies are therefore scrambling to get ahead of an exponential demand increase – and Colombia offers the opportunity to do so.
A welcoming market for investors
Colombia formalized its cannabis industry in 2017. The government published five resolutions defining the rules for the production and processing of cannabis for medical and scientific purposes.
These resolutions established four licenses with which businesses can legally operate in the cultivation of cannabis or manufacture of cannabis products. These licenses permit:
- Cultivation of Psychoactive Cannabis
- Cultivation of Non-Psychoactive Cannabis
- The use of Cannabis Seeds
- The Manufacture of Cannabis Derivatives.
There are no additional barriers for foreign companies entering this sector, provided they obtain one (or more) of these four licenses.
The market in Colombia is now well-positioned for growth and development, and pharmaceutical companies are moving quickly to invest.
Colombia is fast becoming a leader in the cannabis industry and wants to remain this way. The country’s competitive advantage and commercial prestige are driving government responsiveness to foreign investment. As such, Colombia continues to work towards an open-market economy by further enabling the exportation of medicinal cannabis.
Addressing the shortage of cannabis in Northern America
There is a well-known shortage in supply of cannabis in North American markets. Since its legalization in Canada in June 2018, Canadian companies and local suppliers alike are struggling to keep their shelves stocked with cannabis products. Early-adopters of these new commercial opportunities are receiving only a percentage of their orders from wholesalers. This is a result of a widely underestimated demand in the industry.
Majority of states in the US also implemented legislation permitting various forms of cannabis consumption. Several organizations such as the Marijuana Policy Project, National Organization for the Reform of Marijuana Laws (NORML) and National Cannabis Industry Association (NCIA) are lobbying for federal legalization of cannabis. As national support for federal law reform grows, so does the possibility for a further rise in the demand for cannabis.
Due to its significance to a number of industries, anxieties regarding cannabis shortages are amplified. Companies are therefore eager to establish sustainable cannabis supply chains. Colombia’s environment, location and new legal framework offer a dependable source of cannabis for North American markets.
Production costs are low
Though growing, Colombia’s still-developing economy means that cost of labour remains competitive against other markets. Additionally, the licenses available for cannabis cultivation and manufacture are relatively inexpensive.
Low overheads give pharmaceutical companies the opportunity to lower the shelf price of desperately needed medicinal cannabis. Products will therefore be more accessible to users currently receiving bare-minimum prescriptions due to supply and cost constraints.
Advantageous growing conditions and export potential
Colombia’s climate is hot year-round, making it an ideal location for consistent, reliable crop. This ideal weather requires significantly less infrastructure to maintain optimum growing conditions, compared to some North American regions.
Colombia’s geographical location also is advantageous for exportation. Straddling both the Atlantic and Pacific oceans, Colombia’s Buenaventura and northern ports make the country a regional hub for cannabis exports. Colombia’s proximity to the Panama Canal also offers a smooth and convenient connection to North American markets.
Transferable agricultural expertise
Colombia is one of the most bio-diverse countries on the planet, and as such nourishes a strong agricultural sector. With flowers as one of Colombia’s main exports, agricultural experts in Colombia are easily accessible and highly knowledgeable on the lay of the land.
Much of the expertise held in Colombia’s agricultural sector, particularly around the cultivation of flowers, is directly transferable into the cultivation of cannabis plant. This reassures foreign businesses that they are in safe hands when choosing to invest in Colombia for cannabis production.
Colombia’s changing image
For decades, Colombia has battled an illegal drug trade. In legalizing the cannabis industry, Colombia is changing global perspectives on its investment viability and prominence as a regional economic power.
The Colombian government identifies foreign investment as a major contributor to its strong economic development. Colombia’s progressive legislative changes and government initiatives are fueling a steadily-strengthening economy. Colombia is now the third largest economy in Latin America.
We can help you get started
The cannabis sector in Colombia is open for those 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 but aren’t sure how to get started, 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 experts offers a range of legal and commercial back-office services that are customized to each of our clients’ needs.
Contact us today via email here for personalized support. We’re ready when you are.
Learn more about our team and expert authors.
Come and see us at ExpoCannaBiz 2019
Biz Latin Hub’s top cannabis industry experts will be attending ExpoCannaBiz’s 2019 Business Conference from 9-11 May in Cartagena, Colombia.
Our Mining and Corporate Legal Counsel, Juan Sebastian Cardona, will speak at the Conference about their extensive experience in the evolving cannabis trade environment. Secure your place at the conference and connect with us.
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.