Colombia, a potencial medicinal cannabis industry: cannabis is moving in, and businesses investing in this versatile plant are setting themselves up for enduring returns on their investments.
There’s still a great deal of potential in the health sector for medicinal cannabis; only some of the plant’s properties have been tested, and only for some uses. While Colombia’s cannabis legislation is still restricted to medicinal and scientific uses, we look at the potential for this plant going forward.
Why is Medicinal cannabis industry in Colombia popular?
Pharmaceutical companies searching for new solutions are turning to cannabis to seek results. The plant is garnering credit within the medical community and research is being carried out regarding its potential utility in the health sector.
Research and experimenting with this drug hasn’t finished yet. However, cannabis’ newfound fame in the health sector is drawing the attention of businesses, medical professionals, and governments alike.
Regulations in Medicinal cannabis industry in Colombia
Most of the world has been watching Colombia’s progress with cannabis since it decriminalized the plant in 2017. The country stood up a trailblazing legislative framework to support the agricultural production and manufacture of cannabis and its derivatives for medicinal and scientific purposes.
To do this, the country introduced 4 permits businesses can apply for to conduct cannabis-related activities in the country:
- Cultivation of non-psychoactive cannabisç
- Cultivation of psychoactive cannabis
- Use of cannabis seeds
- Manufacture of cannabis derivatives.
Since the introduction of these four licenses, cannabis companies have been drawn in from all over the world to seek out land and licenses to being operations.
Market snapshot
Hundreds of millions of dollars have been invested into this market by both foreign and local businesses, and hundreds of acres of land previously carved for oher agricultural pursuits are now being repurposed into cannabis plantations.
Front-running companies such as local business Clever Leaves recently sent their first exports out to countries experiencing significant shortages since legalizing the plant themselves, such as the United Kingdom and Canada.
Colombia is setting the tone for others in the region to follow suit. The upper South and Central American countries are particularly apt for a thriving cannabis market, unlike others in the far north and south of the region, and rest of world. Colombia and its neighbours possess a winning combination of factors that support cannabis cultivation, including:
- 12 hours of sunlight each day, attributed to their proximity to the equator
- high-performing and transferable agricultural expertise
- low labour costs
- large geographical expanses
- proximity to large local and international consumer markets, such as Mexico, Canada and the US.
Very early on in the game, Colombia claimed the lead on cannabis production, aiming to produce 40.5 tonnes per year from 2019 onwards. This meant contributing to around 44% of the world’s global supply, and raking in US$43 billion by 2025. Though dried flowers are not allowed to be exported, oils are taking the lead in derivative exports.
Significant margin in production costs
Already, business professionals are weighing up the cost margins: in Canada producing one gram of cannabis can cost around US$1.50. Comparatively, Colombia can produce one gram for approximately US$0.05.
By the end of 2018, over 200 companies had already applied for one or more of the country’s cannabis permits. Cannabis and hemp are appearing in various industries, such as cosmetics and ‘cosmeceuticals’, food and beverages, and pet food.
Current and future business opportunities
The country is now thriving with cannabis-growing entrepreneurs who have taken the initiative to invest ahead of the curve, and are reaping the rewards.
Though achieving the permits needed can take some time due to the sheer volume of interest, the payoffs are lucrative. Finding available land for purchase is achievable, and the government is working hard to develop robust institutional infrastructure to support the economic boom.
Businesses and entrepreneurs who choose to move now can enjoy several perks of moving early, including claiming a greater market share, securing a supply chain relatively quickly, and finding and establishing your land for growth and harvest.
On the derivative manufacturing side – many products are surfacing in the market, such as oils and creams. Businesses are getting creative with cannabis derivatives, and reaping the rewards. Consider the opportunity of discovering a new purpose or use for cannabis, or tapping into an untouched market with a new product and monopolizing consumer attention.
Start the conversation with us
Cannabis is booming in Colombia. The market is open for opportunistic investors interested in building an international supply chain. With the stable legal framework established and significant level of available information, Colombia will become a leading exporter of cannabis extracts and derivatives.
Enter the cannabis market in Colombia with expert guidance during your formation process. At Biz Latin Hub, we ensure businesses can break into the Latin American market of their choice with minimal difficulty or delay.
Our team of local and expatriate professionals provides extensive legal and commercial back-office services customized to the specific needs of each client. Our leading legal experts in the cannabis sector regularly connect with the public and private sectors to stay in the know and up to date on legislative requirements for businesses. Let us help your company get ahead of the curve.
Contact us today here at Biz Latin Hub for personalized support.
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