Latin America has taken a firm grasp of the global cannabis industry. This year Colombia is set to produce 40.5 tons of the medical cannabis plant, which is 44% of the global quota allowed by the International Narcotics Control Board (INCB).
An increasingly lucrative area of cannabis production is manufacturing derivatives from the plant. All parts of the plant can be used from the root, through to the stem, right up to the flowers and the seeds. Cannabis oils are a recently popular product on the shelves thanks to its pure and easily-controlled doses. This is a favored product in the medical community currently.
How is cannabis oil made?
By 2025, the cannabidiol market is expected to grow to USD$9.7 billion at a compound annual growth rate of 32%.
Cannabidiol (CBD) is one of the most popular derivatives from the raw plant thanks to easily controlled doses of the psychoactive compound, tetrahydrocannabinol (THC).
CBD is extracted from the hemp plant in a variety of ways. The basic idea, however, is to separate out active compounds and collect them as oil which are then processed further. This can be done using CO2 or ethanol as solvents. Activating the substance requires heating followed by a purification process.
Cannabidiol is a versatile product with a wide range of uses. Dependent on the content of THC in the oil, which can be as little as 0.1% and up to 40% concentration, the oil is said to have different functions.
Those with less than 0.3% THC are reportedly used for medical purposes. Those oils with more than 0.3% THC tend to be more for recreational uses.
Exporting cannabis oils out of Latin America
Public opinion differs widely across the globe on cannabis. The same can be said for governments and legislative boards. Each nation has its own take on cannabis – some more strict than others. Likely the most liberal is Colombia. Despite very extensive and thorough legislation, Colombia is arguably one of the best places to carry cannabis export operations. They have a strong and well-trodden path to export, useful for producers to follow.
Uruguay is also another nation with a well-established cannabis market. Similar to Colombia, if the product is proven and tested to be non-psychoactive, and the company has an export license, cannabis export to foreign nations is highly viable.
Each Latin American nation has its own cannabis export process, again some more complex than others. Generally, however, exporting requires one single license issued by the relevant trade authority. As long as the business and the product are registered and ratified by the relevant health and safety regulations, cannabis export is relatively straight forward in Latin America. Many of the struggles come with importing.
Importing cannabis oils to major consumer markets
Major consumers of Latin American cannabis products are located predominantly in the USA and Canada with an increasing market in Europe. Being able to export a product is one challenge but to get it imported is yet another. In order to do this, there a number of regulations that must be reached with each nation. These regulations are in place in order to guarantee product safety, quality, and environmental protection.
Canada has a rigid and thorough Cannabis Act. Under Part 5, there is a detailed section on Good Production Practices (GPP). This part of the document outlines the strict operating procedures, sanitation programs, and systems to monitor THC content.
Europe and USA
Europe and the USA operate under a strict set of policies. Both these regions insist that importers carry a Good Manufacturing Processes (GMP) license. This license also covers operating procedures, sanitation and THC monitoring. This license also checks for microbial contamination, pesticide contamination and tests for traces of heavy metals. These extensive tests and checks ensure that only the safest and best quality products enter the market.
Europe and the USA also have other regulations to abide by. Both regions ask for imported products to have been grown and harvested in a manner that is in line with regulations of other cultivated crops. The USA has the Good Agricultural Practices (GAP) license, whilst Europe has the Good Agricultural and Collection Practices (GACP). All herbal medicinal products must have this stamp to be retailed in either the USA or Europe.
In terms of how CBD oils can be registered, both of these regions cannot recognize them as a drug. Instead, they are qualified under Herbal Medicinal Treatment. Despite the FDA recognizing their benefits in some circumstances, they cannot categorically approve their registration as a drug.
Get your business cannabis export-ready
Cannabis oils are becoming increasingly popular for a number of purposes. Latin America offers some of the best climates to produce cannabis, a cheap workforce and robust systems for manufacture and export.
Producing CBD in Canada can be up to 20 times more expensive than that in Colombia. Colombia has made itself the single most attractive place to set up a cannabis business.
To help you get started, Biz Latin Hub has a team of expert cannabis lawyers, accountants and agronomists to get your cannabis business up and running and exporting in no time. Get in touch today at [email protected] for your first consultation with our market entry specialists.
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