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  HOME | Colombia (Click here for more)

Medical Marijuana Creates New Economic Opportunities In Colombia

BOGOTA – Medical marijuana is gaining ground in Colombia, where it is overcoming a bad image formed at a time when growing cannabis was associated with violence and holding out promise as an export industry in a market that is growing rapidly across the world.

The young agribusiness began gaining momentum in the South American country in 2016, when a law was enacted that allows the cultivation, production of inputs and manufacturing of products in demand in the pharmaceutical industry, as well as in sectors of the cosmetics industry and textile fibers, among others.

With the regulations, the new medical marijuana industry sought to position its product in the legal market and avoid using the term marijuana, a word associated with violence, drug trafficking and the criminal world.

The figures for the cannabis market are solid and a Euromonitor International study published last year found that the legal marijuana market in the world, estimated at $12 billion in 2018, could reach $166 billion in 2025.

A report produced by the Foundation for Higher Education and Development (Fedesarrollo), a private non-profit organization, found that Colombia has the potential to develop cannabis crops and gain market share with its products.

The study concluded that Colombia’s competitive advantages go beyond a favorable climate and good light conditions, and include access to raw materials, services and infrastructure, as well as suppliers of specialized inputs and cheap labor.

The business has so much potential that more than 60 companies have been authorized to operate in Colombia and last year the Justice Ministry issued 543 licenses to companies that applied for permits for psychoactive cannabis (138); non-psychoactive cannabis (323); and seeds (82).

In Tocancipa, a town near Bogota, you find Pideka-Ikänik Farms, a company that has invested about $30 million to launch its business in Colombia, the company’s operations director, Borja Sanz de Madrid, told EFE.

“The interesting thing about our (cannabis) crops is that they are indoor, where absolutely all plant growth is controlled,” Sanz de Madrid said, adding that this allowed the company to grow a cannabis flower for pharmaceutical use, the first of its kind in Latin America.

The importance of this achievement is that the products obtained from this flower can be marketed to the pharmaceutical industry in Europe because they have international certifications based on supporting good agricultural practices, such as not using pesticides.

Using industrial processes, the company is able to produce an oil that the industry calls an “extract” and which buyers pay $30,000 per liter on the market today.

The cannabis executive said his company expects that in the next few years, it will process up to 5,000 liters of extract that can generate additional profits because other products, such as patches and inhalers that have different uses, can be manufactured from this raw material.

About 30 companies that have cannabis crops in this South American nation have joined the Colombian Cannabis Industry Association (Asocolcanna), which represents them before the Colombian government.

Asocolcanna president Rodrigo Arcila Gonzalez told EFE that a study of the characteristics of marijuana crops in Colombia established that cannabis grows in 15 of the country’s 32 provinces, but the crops are best managed in Cundinamarca, Boyaca, Antioquia, Valle, Valle del Cauca, Meta, Santander, Pereira and Risaralda.

Arcila Gonzalez said the industry was creating jobs and that each hectare planted with cannabis resulted in an average of 17 direct jobs, not counting administrative and scientific staff.

The majority of the companies making large investments in Colombia have the goal of exporting cannabis extract and health products, but others have found a niche in other areas, such as cosmetics, Arcila Gonzalez said.

In light of concerns that cannabis might displace other crops, the Justice Ministry’s Agency for the Regulation and Taxation of Chemical and Narcotic Substances told EFE that “what has been observed to date is that these crops are complementary to others, which are not displaced.”

“It has also been shown that the cultivation of cannabis plants has served as a mechanism to replace illicit crops,” the agency said.

 

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