Colombia warns Canada of gaining muscle in medical cannabis market | Economy

The Colombian president, in front of a large electronic screen, with a powerful speech Evan Duke Announced excitedly Colombia It will also be one of the first countries in the world to allow the export of cannabis in its most important form: the flower. Economic potential is measured in billions of dollars, the president explained at a presentation at the end of July, for which the facility headquarters of one of the accredited companies to grow the herb was chosen. The next day, shares of the Canadian cannabis company plummeted.

Cannabis, the only country in the world, is a flowering herb that can be used for its psychological effects. This is completely legal. Canada is the world’s leading exporter, with the United States, Portugal and Australia experimenting with partial legalization. Colombia, near the equator, has climate favorable for agriculture 365 days a year and can produce medical cannabis for a fraction of what it costs Canadian farmers. Moreover, despite its limitations, its openness to exports made Canada tremble.

“What is here is that Colombia is starting to play big, and with this mandate we are at the forefront in terms of regulatory competitiveness,” the President said while visiting the highly technological fishing crop. Hours by road from Bogota, from Clever Leaves, one of the multinationals – many of Canadian descent – has already settled in the Andean country.

Cannabis Ponnasa’s promise came from a regulation passed in 2016 during its predecessor’s government, Juan Manuel Santos. Strict control thinks Medical and scientific applications Through licenses issued by the Ministries of Health and Justice. The ban on dried leaf was extended due to a certain fear of the authorities that it could be transferred to illegal traffic.

After a two-year agreement between the government and departmental representatives, the Duke signed a safe and informed order on the medical and scientific use of cannabis on July 23, which came into force in August. Thus, it provided the green light to produce cannabis-based textiles, food or beverages. But the biggest innovation is that it allows the export of dried flowers of the dried plant, the best-used form of cannabis and the market for over 50% of medical cannabis sales in the world. The control allows the flower to enter free zones for cutting, drying and going through transformation and packaging operations.

A better climate

Columbia begins with 12 hours of natural light at the equator, and a privileged solar radiation with low fluctuations in temperature and humidity, taking advantage of its climatic conditions. Operating costs are much lower than elsewhere, especially labor. So a gram of cultivation can cost up to six cents, and in Canada or the United States it can cost up to $ 1.89. Moreover, Colombia is the world’s second largest flower exporter – after the Netherlands – and can use that experience and talent for new business.

The Promise of Cannabis has attracted more than $ 500 million in foreign direct investment to Colombia and the country has the potential to become a world leader in the flower-derived and highly valued business of the flower itself. From Clever Leaves, one of the first companies to receive licenses.

In the final stages of the chain, the plant removes the plant until it leaves only the flower, which accumulates its active ingredients, cannabinoids. There are over a hundred, and the assets have not yet been explored. Cleaver Leaves is a public company listed today on Nostalk, the second largest stock exchange in the United States, and has exported cannabinoids to more than 15 countries – with a function dedicated to the production of dried flowers in Portugal.

The companies were mostly alliances of Colombian and foreign capital, with a prominent Canadian participation, in 60% of cases, explains Rodrigo Arkila, president of the Colombian Cannabis Industries Association (Asocolcanna). “Colombia has the most advanced companies in Latin America, the largest crop sizes,” he says. Some companies, such as Pharmaceuticals or Crohn’s, are listed on the Toronto Stock Exchange.

The economic potential of Peru is enormous. Last year, Colombian medical cannabis exports were worth more than $ 5 million, but by 2030 they could be more than $ 1.7 billion, more than flower exports, according to pro-Colombia, a government agency promoting the business. The most promising price index points to more than $ 2,500 million, which is more than coffee — the country’s first product in non-mining energy exports. It will be translated into 44,000 jobs.

The reaction of the markets to the new Colombian law was expected and, in some cases, misguided, because the shares of companies operating in Canada and the shares of companies that did not fall equally. This is in line with the short history of cannabis companies listed on the international market, which have only hit the stock market in the last three years. Some of the companies listed are usually bought and sold together, as a kind of index, so it affects some, affects everyone in general.

Also, there is still a lot to see. The law is strict in Colombia, granting only a limited number of licenses to grow cannabis in the country. In this sense, the law is much looser where Colombia can no longer compete with Canada. As the international cannabis market develops, not all countries will allow the import of flowers due to the risks that are still perceived.

“This is a golden opportunity for companies operating in Colombia,” said Andres Fazardo, president of Clever Leaves. He acknowledged that having a producer “has the potential to produce high quality flowers at very competitive prices has the potential to disrupt the global market”, but warned that no flower can produce that effect. Before you know it Columbia is going to limit itself to extracts, this is a value-added product. But in the current panorama he shows that the flower is a product of the highest value. “It is not an easy task to produce pharmaceutical quality flower suitable to enter various markets of the world,” he estimates. This requires time, investment and quality.

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