Medicinal Cannabis Colombia: Exciting Opportunities for Small-Scale Investors

Over the past five years, there has been a global shift in the perception of cannabis use for medicinal purposes, and governments around the world are changing their attitudes towards the drug. Once considered a fad, solid research now shows that the substance can be used to treat a number of health conditions and aid pain relief, sparking a wave of legalizations in countries such as Canada, and more recently a number of states across the United States.

Following the legalization of cannabis for medicinal and (in some countries) recreational purposes, demand for the genus has skyrocketed, encouraging businesses in countries to increase production to export to markets where the drug is legal. According to the LATAM Cannabis Report, the cannabis industry in Latin America will be worth US$12.7 billion by 2028, up from the US$125 million it was valued at last year. One nation where cannabis growth is on the rise is Colombia, and below we outline the vast opportunities that await…

Colombia: The Perfect Foundations

Latin America is an agricultural powerhouse, thanks in part to its climate and low labor costs, which has made it a popular choice for local and international investors looking to cultivate cannabis plants for domestic and international purposes. With a large population versed in the ins and outs of agriculture and a legal framework that makes cannabis cultivation in the country legal, backed up by government support, small-scale investors are acting fast and expanding into the territory as quickly as they can - after all, demand is at an all-time high, and whilst further countries are expected to legalize or change laws in the coming years, the current climate is unprecedented, and the market will soon be flooded with cannabis stock.

What sets Colombia apart from some other nations is that the Ministry of Justice and Law has promised to respond to cannabis cultivation license applications within 30 days, so being able to enter into the market and set up shop takes no time at all. President Juan Manuel Santos, who legalized the drug back in December of 2015, has worked hard to refine laws to protect citizens and businesses, introduce licenses, and offer grants for small businesses and entrepreneurs in the country who want to incorporate a cultivation firm. That is just one of the reasons why the cannabis industry in Colombia is growing so quickly, and a clear warning to investors to act fast if they want to grab a slice of the market before saturation.

Colombia is earmarked to produce an eye-watering 40 tons of cannabis per year from 2019, around 44% of the world’s legal marijuana, and plans to cement itself as a clear frontrunner in the cannabis landscape. Finding ways to transform its agriculture and export economies has been challenging in today’s globalized times, but acting fast has positioned Colombia as a global leader in medical marijuana, with many other nations struggling to keep up the pace.

Protection for Small Producers

One of the most interesting things about Law 1787 is that the Colombian government will provide protection for small and medium producers in the medicinal cannabis sector, rather than handing out licenses and permits to the highest bidder. In an effort to increase small businesses and innovation in the country, companies with a cultivation area smaller than half a hectare can enjoy additional benefits, including the priority allocation of quotas. In addition, companies who manufacture cannabis derivatives must purchase a percentage of their raw cannabis from small and medium-sized growers and producers in the country, guaranteeing a consistent demand for the substance and offering investors protection over multinational firms who could quite easily enter the market to swallow competition by flashing their wallets.

Growing Number of Success Stories

As demand for medicinal cannabis continues to climb, Colombian producers are beginning to forge global relationships and realize their potential. Clever Leaves, for example, is one of the country’s most renowned Colombian pharmaceutical-grade medical marijuana producers and recently announced that it would become the first company in the country to export its wares to Canada. Khiron Life Sciences Corp, on the other hand, announced a partnership with cannabis company Dixie, based in the United States, giving the Colombian firm access to Dixie’s portfolio of proprietary formulations, allowing it to sell cannabis-infused products across Latin America. PharmaCielo is another shining star in the country, a Canadian-based firm that has an export license for medical marijuana oils, and the first of many international investors setting foot into the country to maximize yields and increase profitability at home.

With more investors understanding the incredible potential that medicinal cannabis can offer, there has been an influx in business investment in Latin America. Indeed, the latest reports suggest that there are now 67 Colombian firms authorized to grow medicinal cannabis, with seven firms using seeds, 48 cultivating non-psychoactive cannabis, and 40 working directly with psychoactive plants for medical research and recreational purposes. That number will likely balloon in the coming years, though being an early entrant can unlock many benefits.

Ever-More Opportunities 

Incorporating a medical cannabis production or export business in Colombia offers a number of opportunities on a domestic and international level. As well as exporting to markets such as Canada and the United States, Mexico recently legalized the drug, homegrown demand for cannabis is also on the increase, and more countries are expected to legalize the drug in the coming years, so entering into the market on the prospect of exporting to your home country could offer a significant return on investment. As always, though, remember that nothing has been set in stone until it has been legalized, and even then it may take a long time before Colombia secures a trade deal to allow your produce to be exported back home.

Businesses looking to take advantage of the medical cannabis sector in Latin America may be spoiled for choice, but those without expertise in the agricultural or medicinal sector may struggle to make their mark on the sector. But the spike in medical marijuana’s popularity can have an impact on virtually every sector, including marketing, retail, logistics, research, recruitment, healthcare, and business-to-business markets, so thinking outside of the box can unlock significant potential; that may mean teaming up with a small cannabis cultivator.

With a number of exciting opportunities for businesses of all shapes and sizes in Colombia, there has never been a better time to incorporate a cultivation plant in the country. However, with competition on the rise, it is important to realize your ambitions and expand as soon as possible, as medical cannabis saturation is likely and licenses won’t be available forever.